Australian Industry Group Performance of Manufacturing Index
Key points from AiG on today's report:
This was the tenth consecutive month of expansion
Six of the seven activity sub-indexes expanded in July (seasonally adjusted)
- New orders (55.8 points) sales (55.8 points) and deliveries (54.0 points) expanded at a moderating pace
- Production (59.0 points) strengthened, exports (53.9 points) remained expansionary and employment (57.4 points) bounced into expansion
- Inventories (49.0 points) contracted at a slower pace than in June.
Six of the eight sub-sectors expanded in July (trend)
- Non-metallic mineral products (69.3 points), wood & paper products (67.0 points) and petroleum, coal & chemical products (56.3 points) expanded more strongly than last month
- Food & beverages (55.9 points) and metal products (56.1 points) and machinery & equipment (58.0 points) kept expanding but at a slower pace
- Textiles, clothing, furniture & other products (34.7 points) fell deeper into contraction, while printing & recorded media (47.9 points) moved into contraction after a welcome expansionary streak
In July manufacturers cited increased demand from construction, mining (possibly reflecting commodity price increases) and agriculture for locally manufactured construction materials, machinery and equipment
- Large government funded projects in NSW and Vic are also providing a positive source of demand, as is a strong pipeline of solar and wind power projects
- However manufacturers across many sectors are seeing significant challenges from: soaring energy costs; higher raw material costs (the flipside of higher commodity pricing); the stronger Australian dollar; the departure of automotive assembly; strong international competition; and ongoing weakness in the retail sector.
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Earlier we got the new CBA manufacturing PMI: Australia data - CBA / Markit PMI 54.4 (prior 56.2)
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Australian economy keeps on keeping on.
