Australian manufacturing began to expand in February for the first time since July last year, according to the latest data.
The Australian Industry Group/PriceWaterhouseCoopers Australian Performance of Manufacturing Index rose 4.4 points in February to 51.1.
It was the index's first move above the 50 level separating expansion from contraction since July last year.
The sub-sectors of wood products and furniture, paper, printing and publishing, chemicals, petroleum and coal products, miscellaneous manufactures, construction and materials all expanded in February.
"The welcome lift in the manufacturing index was largely off the back of a substantial improvement in the new order sub-index and those sub-indexes related to restocking," said Ai Group Chief Executive, Heather Ridout.
"This suggests a more encouraging immediate outlook for the sector.
"While only reflecting a single month's improvement, the result underlines the resilience of the sector in the face of extremely tough trading conditions and the impact of the strong dollar."
The new orders sub-index rose 7.2 points to 52.3, marking the first increase in new orders after five months of decline.
Manufacturing inventories increased in February, with the seasonally adjusted sub-index up 13.2 points to 52.1.
Seven out of the 12 manufacturing sub-sectors recorded declines in activity in February, up from three sub-sectors in December.
Seasonally adjusted, the production sub-index fell 1.0 point to 49.3, indicating manufacturing output declined, albeit slightly, in February.
The seasonally adjusted employment sub-index decreased 4.0 points in February to 45.0.