none

AUSTRALIAN MANUFACTURING GROWTH CONTINUES – FOR NOW

01-11-2019
by 
in 

The manufacturing sector continued its positive run in October, albeit at a slower pace, with the Ai Group Performance of Manufacturing Index falling by 3.1 points to 51.6. And while the sustained growth of the food and beverage sector continues to play the leading contribution to the figures, there are indications that manufacturers may be facing troubled times in the summer.

Both food and beverages, up 1.3 points to 61.8, and machinery and equipment, up 0.2 points to 54.2, increased their pace of expansion. The chemicals sector fell slightly to 52.0, slowing its expansion. However, the continuing slowdown of the construction sector continued to weigh heavy on certain manufacturers, with building materials down 3.4 points to 48.5, and metal products still declining at 43.5.

However, it is the activity indexes that give most cause for concern, with input prices rising again to a new high of 74.7, and the selling prices index falling by 3.9 points to 45.0. And while the lower Australian dollar can be used in part to explain some of the input price index rise, its effect on exports may also be apparent, with that index rising 2.2 to 51.8. (And a number of manufacturers highlighted increasing sales to the USA.)

More worrying, though, was a sharp fall in new orders, down 8.8 to 48.3, despite evidence that pre-Christmas trade was running early this year, born out by an increase in the production index, which rose to 55.5.

Announcing the figures, Ai Group Chief Executive Innes Willox said: “The overall pace of expansion weakened with a slower rise in employment, and a contraction in new orders overshadowing rises in sales and production.

“Weakness in construction was clearly a factor dampening conditions in the metals and building products sectors while continuing strength in mining assisted the machinery and equipment and chemicals sectors.

“There are indications of a bring-forward of Christmas-related sales. This, together with a slight decline in new orders will have manufacturers wary about the sector-wide performance in the coming months,” he concluded.

 

Related news & editorials

  1. 09.03.2020
    09.03.2020
    by      In
    South Australia boasts a highly skilled and educated workforce, a renewed focus on entrepreneurship and innovation, and multi-billion-dollar defence industry contracts.
    The state’s world-class research institutions and universities, an investment in skills and the development of entrepreneurial... Read More
  2. 02.03.2020
    02.03.2020
    by      In
    While the manufacturing sector continues to decline with the Ai Group’s Performance of Manufacturing Index falling to a new low of 44.3 in February, there are grounds for optimism in some of the underlying data. Even though the PMI figure is the lowest for almost five years, key subindexes such as... Read More
  3. 27.02.2020
    27.02.2020
    by      In
    Industry Update sat down with Matthew Kelly, EM Manufacturing and Wholesaling, St.George, to find out his views on the financial health of the manufacturing sector in 2020.
    IU: How do you view the general financial climate for the Australian manufacturing sector in 2020?
    MK: I believe 2020 will see... Read More
  4. 14.02.2020
    14.02.2020
    by      In
    Universal Robots has teamed up with global vendor finance company DLL to launch a cobot leasing programme that will enable any manufacturer to reap the benefits of automation without worrying about cashflow or seasonal fluctuations.
    The global programme is expected to appeal to the market in... Read More