Manufacturing remains in negative territory

03-05-2011

Significant declines across transport equipment, textiles and miscellaneous manufacturing, largely due to the strong Australian dollar, kept the manufacturing sector in negative territory in April, according to the latest industry data.

The Australian Industry Group – PwC Australian Performance of Manufacturing Index (Australian PMI) rose just 0.5 points to 48.4 to remain below the 50 point level separating expansion from contraction.

New orders fell again in the month, with nine out of the 12 sub-sectors experiencing a decline. 

While overall manufacturing production expanded in April, selling prices slipped lower (down 8.7 points to 46.0).

"The continued weakness of the Australian PMI reflects consumer caution and the substantial erosion in the competitiveness of the industry related to the volatile and rising dollar, the Australian Industry Group Chief Executive, Heather Ridout, said. 

“The uncertainty of how this will evolve is the essence of the pressures on the industry.

"Next week's Federal Budget needs to address this critical uncertainty in what is a key and big employing sector of the national economy.

“There is clearly a requirement for more proactive policies to build productivity in manufacturing through investments in workforce development, energy efficiency, the exploration of export opportunities and R&D," Ms Ridout said.

PwC Global Head of Industrial Manufacturing, Graeme Billings, said: "Manufacturers are facing a most testing environment due to the strength of the exchange rate and consumer caution. 

“April did see some positive movements in some manufacturing sub-sectors such as building materials, basic metals, food and beverages and machinery and equipment.  These signs are, however, very tentative and are overshadowed by the flatness or contraction across the remaining sub-sectors.

"Against this background, it is imperative for businesses to maintain the search for new opportunities, new markets, new product lines and new sources of industrial efficiency," Mr Billings said.

RELATED NEWS

  1. Industry 4.0 – or the Fourth Industrial Revolution, where the computerisation of industry becomes optimised through increased interconnectivity and smart automation – is a hot topic in global circles. But it’s not a matter of just magically flicking a switch and transforming your facility into a...
  2. The transformation of Australia’s recycling sector has stepped up another gear with the Australian and Victorian Governments jointly announcing 13 new projects that will see 137,000 tonnes of plastics, paper, glass and tyres remade into new products while creating new jobs and new investment in the...
  3. The high performance flooring system market size is estimated to reach US$15.29 Billion in 2028. This is being driven by increasing use of heavy-duty flooring materials in various industrial and commercial facilities is a key factor driving global market revenue growth.
    According to the latest...