none

Manufacturing sector weakens in March

31-08-2010
by 
in 
Manufacturing sector weakens in March

 

After moderating in February, Australian manufacturing performance was marginally weaker in March, hit by a decline in exports and fall in new orders.

This is the 14th consecutive month the sector has contracted, according to latest industry data.

The Australian Industry Group performance of manufacturing index (Australian PMI) fell 1.2 index points in March to 44.4 points.

The index has been below the key 50 level, which separates expansion from contraction, since February 2012.

AiGroup chief executive Innes Willox said it was a disappointing result given there were some encouraging signs in the February report, where the index rose 5.4 points.

"The strong dollar, falling selling prices, further cost pressures and the weakness of commercial and residential construction continue to take their toll," he said.

Mr Willox said an interest rate cut from the Reserve Bank of Australia would benefit the sector.

"In the absence of any sign of inflationary pressures and with market interest rates still relatively high, the industry would certainly welcome a further reduction in official interest rates," Mr Willox said.

Manufacturing exports fell for the eighth straight month and selling prices declined amid rising costs.

“The decline in export earnings is particularly worrying and reflects soft demand in a number of markets, intense competition and, of course, the high dollar, Mr Willox said. 

Mr Willox said the falling trend in selling prices indicates that widespread price discounting is probably still occurring, as manufacturers seek to compete globally with an ongoing strong Australian dollar.

"The continuing gap between input prices and selling prices is contributing to a worsening profit squeeze in manufacturing," he said.

 The decline in manufacturing employment continued to ease in March with the sub-index rising by 1.2 points to 48.7.

Related news & editorials

  1. 18.10.2018
    18.10.2018
    by      In
    Amidst global concern about plastic waste in the world’s oceans, it is rather ironic that it is a soft drinks company that is actually doing something about the problem. SodaStream International, which has always taken a different approach to the soft drinks market, is now taking a different... Read More
  2. 16.10.2018
    16.10.2018
    by      In
    The Government has unveiled a $5 million scheme to encourage high-quality graduate engineers to work in Australia’s automotive sector. The Automotive Engineering Graduate Programme aims to increase the level of advanced engineering skills in the sector and is part of the $100 million Advanced... Read More
  3. 15.10.2018
    15.10.2018
    by      In
    Industry Update is delighted to announce that we are expanding our video offerings with a new series of tutorial style videos that perfectly complement our existing library of news style videos.
    In the first series, we are partnering with sensor specialist VEGA to publish eight playlists of videos... Read More
  4. 15.10.2018
    15.10.2018
    by      In
    Kennards Hire is certainly “doing its bit” to help Australia’s drought stricken farmers and their families. The work began with the Kennards branch network throwing itself behind the Buy a Bale initiative, and is now continuing with a key role in the Mega Farm Rescue.
    Kennards Hire team members... Read More