none
none

ELEVENTH CONSECUTIVE MONTH OF EXPANSION FOR MANUFACTURING

01-09-2017
by 
in 
Manufacturing data are positive

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.

Delving deeper into the figures, six of the seven activity subindexes were on the up, with only exports showing a slight decline. The production and new orders subindexes were particular standouts, with impressive figures of 61.4 and 64.3, respectively.

So far as the manufacturing subsectors are concerned, seven out of eight were positive during August, with only textiles and furnishing contracting, albeit at a slower rate than recent months. The standout subsectors were nonmetallic mineral products and wood and paper products, registering 72.3 and 71.1 points, respectively.

However, underlying the figures, not everything in the garden is rosy. Manufacturers in several sectors expressed concern at the relatively high value of the Australian dollar, hampering export activity and leaving domestic products open to competition from lower-cost imports.

Rising energy costs were a major concern across the board, and certain subsectors pointed to growing skills shortages. However, companies in the machinery and equipment subsector are looking to cover shortages by attracting skilled workers from the automotive sector.

Different data

The Ai Group also took the opportunity to release a statistical analysis of its own figures compared with the official figures from the Australian Bureau of Statistics. And while it found that there is broad correlation between the Australian PMI and ABS data relating to manufacturing, certain measures have begun to diverge during 2016 and early 2017.

The report concludes that this appears to be due to the effects of the decline and exit of automotive assembly on aggregate output and sales volumes, but not on all other indicators.

So while the ABS data show that the overall volume of manufacturing output has been falling due to the gradual demise of one subsector of industry (ie passenger car manufacture), the Australian PMI measures changes in the proportion of businesses that are increasing or decreasing their activity across all subsectors, rather than just the changes in their aggregate output volume.

Ai Group
aigroup.com.au

 

Related news & editorials

  1. Lots of moneyb
    06.02.2018
    06.02.2018
    by      In
    Confidence continues to rise as Australian businesses predict healthy profits well into the year, according to illion’s latest Business Expectations Survey. The preliminary survey for the June quarter sees the Business Expectations Index rising by 31% over the previous year.
    Business confidence has... Read More
  2. Australian manufacturing
    01.02.2018
    01.02.2018
    by      In
    The inexorable rise of the Australian Performance of Manufacturing Index during 2107 has continued into the new year with production leading the way. The AI Group’s Australian PMI has come in at 58.7 in January 2018, showing an increased level of growth, and the production subindex jumped to 62.7,... Read More
  3. Belgian cement works
    31.01.2018
    31.01.2018
    by      In
    Australian technology company, Calix, has secured EUR3.4 million in working capital from Efic to build the CO2 capture facility for the Low Emissions Intensity Lime and Cement (LEILAC) project in Belgium.
    Efic, the Australian Government’s export credit agency, is a specialist financier that... Read More
  4. Lots of money
    24.01.2018
    24.01.2018
    by      In
    This year looks likely to be the last chance for small businesses to take advantage of the Federal Government’s $20,000 instant asset write-off. So any business with an annual turnover of less than $10 million has until 30th June 2018 to make a qualifying investment.
    The scheme originated in the... Read More