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TIMES are tough for manufacturers in Australia but Brisbane based electrical switchboard maker PSG is defying the trend by expanding.
Dunn & Bradstreet today reported falling expectations in Australian business for capital expenditure, new credit and employment in its latest Business Expectations Survey.
The survey’s capital investment index has fallen from a weak Q2 to an even worse Q3, from five to negative three, its lowest point in more than three years.
Actual investment in the March quarter dropped to negative six, its lowest level since early 2009, with no manufacturers surveyed planning on capital expenditure.
PSG general manager Denis Jackson says the market for manufacturers is flat, but the company’s diversified product range has it in good stead.
PSG is in the process of expanding its Eagle Farm facility from 3500 square metres to 6000 square metres. Jackson admits the decision to expand would have been harder if it was to be made today.
The company also has a second manufacturing facility in Melbourne.
“We would have been a bit more cautious. However, we are not too concerned about it as the diversification in the business can cater for that,” says Jackson.
“Whilst everybody is struggling a bit and we can see inquiry rates have dropped dramatically, we are still chugging along.”
Dun & Bradstreet director of corporate affairs, Danielle Woods, says the drop in capital investment is likely to have an impact on productivity and growth.
“This movement takes expectations back to levels seen during the GFC, and the corresponding movement in employment intentions shows businesses are continuing to bunker down and limit expenses.
“This will naturally have a knock-on effect for spending activity in the rest of the economy.”
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