After a promising two months of mild expansion in activity, the Australian manufacturing sector slipped back in November, according to the latest industry data.
The Australian Industry Group Australian Performance of Manufacturing Index, (Australian PMI) fell by 5.4 points in November to 47.7 points (seasonally adjusted). 50 points marks the separation between expansion and contraction.
Production, new orders and supplier deliveries all fell below 50 points after a promising lift last month.
The employment sub-index moved up 1.5 points to 50.1 points, indicating that manufacturing employment numbers were stable in November. This was the highest reading in this sub-index since October 2011.
Growth in food and beverages manufacturing slowed while expansion rates improved in some of the smaller sub-sectors such as wood and paper products and printing and recorded media.
The larger sub-sectors of non-metallic mineral products (mainly building materials), metal products and machinery and equipment continued to show contraction in November.
Australian Industry Group Chief Executive, Innes Willox said: “Survey respondents indicated that the mild lift in local new orders immediately after the September federal election is already drying up, as mining, government, maintenance and R&D spending slows.
“While the current downward pressures on the dollar are positive for the industry, the currency remains stubbornly high.
“The dollar and fierce import competition continue to take their toll, as many businesses struggle to maintain market share in an environment of generally weak demand for local goods and equipment.”
Export markets also remain tough under the influence of the relatively high dollar with the exports sub-index dropping under 30 points again this month.