A small manufacturing business has criticised the Tasmanian Government for restricting its ability to expand.

In a week when more than 180 job losses have been announced in the sector, a Launceston business says it is struggling to expand.

Roadside Products is the biggest supplier of roadside posts in Australia.

Business is booming but 95 per cent of its customers are interstate.

Managing director Ralph Norton says some local councils and State Government contractors are importing cheaper products from countries like China.

He says the business has applied for a $150,000 grant to expand and create 10 new jobs, but it has been knocked back twice.

"We have alternative properties in Queensland where we distribute from and we have an option to move our business to there, but we would prefer to stay here," he said.

"We're based here, we want to expand our business here but it's difficult."

Business manager Margaret Burt says some local councils and state government contractors are importing cheaper products from overseas.

"I would expect that as a local manufacturer that there would be a preference for our product."

Last year, a Tasmanian steel business missed out on a contract to build wagons for TasRail in favour of a Chinese company.

Hayward's managing director Steve Edmunds believes it is cheaper in the long run to support local jobs.

"The contracts that are let overseas are only cheap on the surface," he said.

The Government says about 60 per cent of its contracts go to Tasmanian businesses.