Manufacturing sector remains flat


Manufacturing activity remained flat in November according to the latest industry data.

The Australian Industry Group – PwC Australian Performance of Manufacturing Index (Australian PMI) was broadly unchanged – up just 0.4 points to 47.8, to remain below the 50 points level separating expansion from contraction.

Manufacturing continues to be impacted by a range of factors with businesses citing low levels of building activity, competition from cheap imports, skilled labour shortages and uncertainty over the impacts of the carbon tax as impediments to stronger performance in November. 

Construction materials, clothing & footwear and wood products & furniture were the poorest performing sub-sectors in the month whereas transport equipment and miscellaneous manufacturers registered strong levels of activity.

"Manufacturing conditions clearly remain tough and have been so for much of the past year raising critical issues for policy-makers and businesses alike, said AiGroup Chief Executive, Heather Ridout. 

“While the Australian PMI shows signs of an easing in the pace of decline in current activity and new orders, employment levels fell sharply in November suggesting an ongoing loss of manufacturing capability, Ms Ridout said.

“This highlights the importance of the Federal Government's manufacturing taskforce in developing a long-term strategy for the industry. At the same time, it is encouraging that the just released ABS capital expenditure data indicates a solid upturn in manufacturing investment suggesting that underneath the data there is a strong vein of confidence in the prospects for the industry."

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