none
none

PRESSURE ON FOR MANUFACTURING MARGINS DESPITE CONTINUED GROWTH

01-05-2017
by 
in 

Australian manufacturing continues to grow, with the Australian PMI for April coming in at a robust 59.2 – marking seven consecutive months of growth and the second highest figure since May 2002, following 59.3 in February 2017.

However, the monthly report from Ai Group is cautious in its assessment of then underlying trends, pointing to rapidly rising energy costs as an urgent issue for many manufacturers and intense overseas competition keeping margins tight.

On the up side, all seven activity subindexes in the Australian PMI expanded in April, with highlights including new orders at 61.5, sales at 65.5, supplier deliveries at 62.3 and exports up 7.5 points to 58.6. And capacity utilisation remained high in April, at 77.4% of all available capacity.

Interestingly, the index for the machinery and equipment subsector grew for the ninth consecutive month (up 0.4 to 60.5), in spite of the continuing contraction in Australian automotive assembly.

According to Ai Group Chief Executive, Innes Willox: “Resurgent output and prices in our agricultural and mining sectors are having a positive effect on demand for a range of locally produced manufactured equipment. This surge is occurring despite the closure of the automotive assembly sector and recent disruptions in some locations due to Cyclone Debbie.”

"The outlook is not smooth however. Sharp rises in energy costs – and especially gas costs – are threatening this growth. These increases in energy costs are proving difficult to pass on, threatening margins and the very viability of businesses in some manufacturing sectors.”

Related news & editorials

  1. Manufacturing data are positive
    01.09.2017
    01.09.2017
    by      In
    The remarkable growth of the manufacturing sector continued during August 2017, with the Ai Group Australian PMI rising by 3.8 points to 59.8. Not only is this the highest monthly figure since 2002, it marks an unprecedented eleventh consecutive month of expansion for the manufacturing sector.... Read More
  2. Manufacturing on the rise
    03.08.2017
    03.08.2017
    by      In
    Australian manufacturing has continued its upward path for the tenth consecutive month, with the Ai Group’s Performance of Manufacturing Index coming in at 56.0 for July.
    The manufacturers surveyed for the report cited increased demand from construction, mining and agriculture for locally... Read More
  3. 17.07.2017
    17.07.2017
    by      In
    After just over a year of negative outlooks and preparing for the worst, Arrium may finally have a glimmer of hope. 
    Arrium's Whyalla steelworks has been bought out by Sanjeev Gupta, a British businessman who has had significiant experince turning around flagging steel producers and companies. 
    His... Read More
  4. 04.07.2017
    04.07.2017
    by      In
    The Ai Group’s Australian PMI ended the financial year on yet another high, recording a slight increase to 55 for the month of June 2017. And although the index only increased by 0.2 from the previous month, it did mark the ninth consecutive month above the magical 50 figure that indicates growth.... Read More