none

AUSTRALIAN MANUFACTURING CONTINUES TO GROW FOR 20TH MONTH

01-06-2018
by 
in 

Australian manufacturing industry continues to perform, with the Ai Group’s Performance of Manufacturing Index easing slightly to 57.5 in May, marking the 20th consecutive month of growth. But while the current “bull run” is beginning to draw comparisons with the sustained growth of the early years of the 21st century, it still has a way to go to match the 50 consecutive months of growth between July 2001 and July 2005.

Looking behind the headline figures, sales levels were stable in May (50.4), while finished stocks contracted (47.0), as manufacturers drew down on inventories, with some reporting shortages or delays in raw material supplies. Encouragingly, new orders remained above 60 points – a good sign of ongoing demand and continuing growth for the sector.

The machinery and equipment subsector remained strong at 59.9, and has now recorded 19 consecutive months of stable or expanding activity, following five years of contraction. Equipment for mining, agriculture and food processing and vehicles such as trucks, trains, buses and boats all appear to be in demand, although some manufacturers are seeing increased competition from cheaper imports.

However, business conditions are still far from perfect. The input prices subindex rose to 70.0 in May on the back of increasing energy costs, and wages remained elevated (58.4). The selling prices subindex dropped 2.4 points to 55.1, but exports recovered from a poor showing in April, returning to positive growth at 52.5.

In announcing the figures, Ai Group Chief Executive Innes Willox highlighted the increase in manufacturing employment, saying: "The recovery of manufacturing employment has been a feature of this period of expansion. As is the case in other parts of the economy, this employment growth has been facilitated by moderate wage outcomes.”

Related news & editorials

  1. 03.12.2018
    03.12.2018
    by      In
    Australian manufacturing continues to grow, according to the Ai Group’s latest Performance of Manufacturing Index, but the figures show some worrying signs. The Australian PMI for November 2018 remained in positive territory at 51.3, but at a full seven points below the previous month, this is the... Read More
  2. 20.11.2018
    20.11.2018
    by      In
    All Australian states and territories recorded an increase in gross state product in 2017-18, according to the latest figures from the Australian Bureau of Statistics. The ACT, Victoria, Queensland and Tasmania exceeded the national gross domestic product growth rate of 2.8%, while New South Wales... Read More
  3. 14.11.2018
    14.11.2018
    by      In
    Although Australia’s small and medium-sized businesses generate employment, drive innovation and boost competition, it has always been difficult for them to get credit finance from banks, especially in the past few months, due to the royal commission into financial services, stricter loan... Read More
  4. 01.11.2018
    01.11.2018
    by      In
    The growth of the manufacturing sector continued through October 2018, with the Ai Group’s Performance of Manufacturing Index holding firm at 58.3, just a tick below September’s rating of 59. The 25th consecutive month of PMI ratings above 50 (indicating growth) comes with further encouraging... Read More