The recent slide in manufacturing activity in Australia has eased, with the sector broadly stable last month.
The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI) increased by 2.9 points to 49.4 in October (readings above 50 indicate an expansion in activity).
Production was up 8.6 points to 51.1, while new orders rose 5.3 points to 51.1.
Manufacturing exports also expanded (up 8.5 points to 50.7), partly due to the falling Australian dollar.
Among the eight manufacturing sub-sectors, the large food, beverages & tobacco (56.7 points) and the smaller wood & paper products (59.5 points) were the only sub-sectors to expand in October.
AiGroup chief executive, Innes Willox, said: “The slide in manufacturing activity we have seen for the past couple of months has eased, with the sector broadly stable in October. “However, conditions remain patchy within the manufacturing sector with considerable differences between sub-sectors and with production and new orders lifting, whereas employment fell further during the month.”
Respondents to the survey indicated that despite the fall in the Australian dollar since early September, it remains relatively high and import competition remains intense.
“More generally, businesses remain cautious and hesitant about undertaking the investments needed to underwrite future productivity and employment growth,” Mr Willox said.