The Ai Group’s Australian Performance of Manufacturing Index has registered its eighth consecutive month of growth, with a figure of 54.8 in May. And while this is a slower rate of growth than in recent months, the average figure for the past six months still comes in at a robust 56.2.
Each of the seven activity subindexes in the Australian PMI expanded during May - albeit at a reduced rate from the previous month. Importantly, new orders remained high at 58.1, pointing to continuing expansion. However, exports slowed to 52.0, which may be some cause for concern.
Interestingly, the wages subindex rose by 3.0 to a high of 61.4 in May, confounding popular belief of low wage growth in Australia.
According to Ai Group Chief Executive, Innes Willox: "Regardless of the shrinking local auto industry and generally low business investment, the important machinery and equipment manufacturing subsector again built on what has been an impressive recovery after an extended slump.”
“Less positively, slower local retail conditions are having some negative impacts for manufacturers and elevated input costs are an ongoing challenge for everyone, particularly due to rising electricity and gas costs," added Willox.