Australian manufacturing has continued its run of month on month growth, with the Ai Group’s Performance of Manufacturing Index sitting steady at 57.4 for June 2018. This marks the 21st consecutive month of growth, which is the longest such run since the 50 continuous months recorded from July 2001 to July 2005.
Analysing the underlying data, the run of growth shows no sign of abating, with key indicators such as production (up by 3.2 points to 58.9 in June) and sales (up 10.8 to 61.2) indicating that growth is set to accelerate.
Even the manufacturing employment subindex rose 2.0 to 58.1 points in June, reflecting the latest ABS data, which put manufacturing employment at its highest level since August 2012.
Stock levels remained stable, but capacity utilisation rose to 79.1% - well above the historical average of 73.1.
In releasing the Australian PMI report for June, Ai Group Chief Executive Innes Willox commented that: “Growth was evident across the manufacturing sector including in the large food and beverages, metal products and machinery and equipment subsectors, even though the drought conditions in some parts of the country are flowing along supply chains into these subsectors.
“With new orders continuing to come in at growing levels,” Willox added, “the immediate outlook is for further growth in production and employment. As to the longer term, manufacturers, particularly those in more energy intensive segments of the sector, remain concerned about ongoing uncertainty over energy policy and its dampening impact on the investment needed to ease price pressures."