The Australian manufacturing sector expanded for a sixth straight month in December – the longest run of expansionary readings since 2010.

The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI) declined marginally by 0.6 points to 51.9 to remain above the 50-point level separating expansion from contraction.

“The further expansion of Australian manufacturing in December capped a strong second half of 2015, said Ai Group Chief Executive, Innes Willox.

“After the extended weakness the sector has experienced over the past five years, this is a most welcome turnaround.”

With export growth solid and production, sales and new orders all on the rise, Mr Willox said manufacturers had a good base to launch from in 2016.

However, declines in automotive assembly, the ongoing contraction of mining investment and tough conditions in global metals markets continue to constrain the growth of the sector, Mr Willox added.

Last month five of the eight manufacturing sub-sectors expanded (above 50 points):

·       Wood & paper products (down 2.9 points to 64.3)

·       Petroleum, coal, chemical & rubber products (down 2.2 points to 55.2)

·       Non-metallic mineral products (down 3.8 points to 54.2)

·       Food & beverages (down 0.6 points to 51.8)

·       Printing & recorded media (up 3.3 points to 50.9).  

The machinery and equipment (up 4.1 points to 47.2), metal products (down 0.4 points to 48.6), and textiles, clothing, footwear, furniture & other (down 2.7 points to 49.3) sub-sectors all contracted.

New orders were up 2.1 points to 55.3 and exports were down 1.5 points to 54.9.

This augurs well for further expansion in 2016, Mr Willox said.