Australian Fabricators Pivot to Profitability Amidst Missed Revenue Targets
Factory.app
- 50% of Australian/New Zealand fabricators missed 2025 revenue targets, yet 87% plan to maintain or grow workforce in 2026
- Increasing Profitability (67.4%) is sector's top priority for 2026, signficantly outrating Acquiring New Customers (54.3%).
- While 95.7% use digital accounting software, nearly half still use paper-based production tracking, with industry-specific software adoption at just 26.1%
- Main challenges include material costs (30.4%), labour pressures (26.1%), and competition (30.4%)
- 41.3% plan to increase capital expenditure in 2026, showing confidence despite difficult conditions
FOR IMMEDIATE RELEASE
10 February 2026
Sydney, Australia
Australian Fabricators Pivot from Growth to Profitability as Half Miss 2025 Revenue Targets
Yet 87% maintain or grow workforce; "Profitability over Growth" becomes the new mantra for 2026
SYDNEY – Australian and New Zealand fabricators are entering 2026 with a clear strategic shift: after half fell short of revenue expectations in 2025, the sector is pivoting hard toward profitability and operational efficiency – not retreat.
New industry research reveals that 50% of SMB fabricators missed their 2025 revenue targets, squeezed by material costs (30.4% cite as major challenge), labour pressures (26.1%), and intense competition (30.4%). Yet rather than cutting costs through layoffs, 87% plan to maintain or grow their workforce in 2026, and 41.3% are increasing capital expenditure.
For the first time in years, "Increasing Profitability" (67.4%) has overtaken "Acquiring New Customers" (54.3%) as the sector's #1 strategic priority – signalling a fundamental mindset shift from growth-at-all-costs to operational excellence.
"The era of chasing revenue at any price is over," said Paul Lutkajtis, CEO of Factory.app, which conducted the research. "Fabricators are telling us they want to get more out of what they already have – more efficiency from their teams, more output from their equipment, more margin from every job. This isn't austerity. It's strategic discipline."
The Digital Divide: Back Office vs Shop Floor
The research uncovered a striking productivity gap. While 95.7% of fabricators use digital accounting software, nearly half (47.8%) still rely on paper-based processes for production tracking, and 32.6% use whiteboards to manage shop floor operations. Industry-specific production software adoption sits at just 26.1%.
"The back office went digital a decade ago. The shop floor didn't," Lutkajtis said. "And that's where the profitability gains are being left on the table."
When asked to rate how well technology providers serve SMB manufacturers, fabricators gave an average score of just 4.9 out of 10. The consistent complaint: software is over-engineered, designed for mass production, and ignores the realities of custom fabrication work.
"Systems seem to be aimed at manufacturers that mass produce. Smaller businesses that do a lot of different jobs are left struggling," one South Australian business owner reported.
When selecting software, 78.3% of fabricators rate "Ease of Use & Simplicity" as very important – the clear #1 priority, well ahead of AI adoption (26.1%) or automation features.
Resilience, Not Retreat
Despite tough conditions, the sector's 2026 outlook is cautiously optimistic. Half of fabricators (50%) express at least "somewhat confident" outlooks, while only 6.5% are "very concerned."
The workforce remains stable: 39.1% plan to increase staff, 47.8% will maintain current levels, and just 2.2% plan reductions. Capital expenditure is trending upward, with 41.3% planning increases.
"This is a sector backing itself," Lutkajtis said. "They're not waiting for conditions to improve. They're investing now – in people, in equipment, in better systems – to position themselves for profitable growth when demand returns."
The Perception Gap
The research also revealed fabricators feel deeply misunderstood by clients and policymakers. When asked how well outsiders understand the fabrication industry, respondents gave an average score of just 4.0 out of 10.
"People believe a 3-day job should only take 3 hours," one Queensland operations manager said. "They don't understand the costs and how much time things take."
Despite this perception gap, fabricators remain optimistic. With 71.7% holding 20+ years of industry experience, the sector is drawing on deep expertise to navigate 2026's efficiency mandate.
About the Research
The research was conducted between June and November 2025 across Australia and New Zealand, capturing insights from business owners (69.6%), operations managers (13.0%), and senior staff across custom sheet metal fabrication, structural steel, roofing, transport, and other specialised sectors. Respondents represent businesses ranging from 1–250+ employees, with 91.3% in the 1–50 employee range.
Resources
Download the full report
Access the digital press kit (additional, charts, workflow, fabrication & company images)
About us:
About Factory
Founded in 2021 by brothers Paul and Michael Lutkajtis, Factory is a SaaS company that provides a manufacturing process management platform designed for small and medium-sized fabrication and manufacturing businesses. The platform helps companies manage jobs from quote to delivery and purchasing, offering customisable tools tailored to the needs of smaller manufacturers. Headquartered in Sydney, Factory now serves over 200 customers across Australia, North America, and the UK.
Contact details:
Tony Been
Head of Growth
[email protected]
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1. How has your business performed in the past 12 months compared to your expectations__.png
50% of fabricators fell short of their 2025 revenue expectations, squeezed by material costs, labour pressures, and competitive dynamics. -
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2. What are the biggest challenges your business is currently facing_.png
Material costs (30.4%), competitive environment (30.4%), and hiring quality staff (28.3%) topped the list of challenges facing fabricators in 2025. -
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4. How do you expect staffing levels in your business to change over the next 12 months_.png
87% of fabricators plan to maintain or grow their workforce in 2026, with only 2.2% planning reductions - signalling resilience over retreat. -
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6. What are your business priorities for the next 12 months_.png
"Increasing Profitability" (67.4%) is the top strategic priority for Australian fabricators in 2026, significantly higher than "Acquiring New Customers" (54.3%). -
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5. How do you expect your capital expenditure to change over the next 12 months_.png
41.3% of fabricators plan to increase capital expenditure in 2026 despite challenging conditions, betting on efficiency gains through investment. -
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8. How do you feel recent global trade developments, including tariffs and trade policies, will impact your business over the next 12 months_.png
Fabricators rate concern about global trade developments at approximately 4.5 out of 10 - present but not dominant compared to operational challenges. -
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7. What tools or systems do you currently use to manage your jobs and operations_.png
The digital divide: 95.7% use accounting software, but 47.8% still track production on paper and 32.6% use whiteboards for shop floor management. -
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Factory_1.jpg
Metal fabrication in action: SMB fabricators are investing in workforce and equipment despite revenue challenges, prioritising profitability over growth-at-all-costs. -
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Factory - State of SMB Fabrication Industry Header.png
Australian fabricators are pivoting toward profitability in 2026, with 87% maintaining or growing workforce despite half falling short of 2025 revenue targets.
