Australian Industry Group Performance of Manufacturing Index for October
- prior 49.8
Key points from AiG:
- Shift to mildly expansionary conditions was driven by stronger growth in exports as well as in sales and new orders
- Four of the activity sub-indexes expanded in October. Sales (55.0 points) and new orders (54.7 points) expanded solidly. Exports (56.0 points) returned to expansion from stable conditions while production (49.7 points) eased. Employment (47.7 points) remains contractionary and inventories (45.9 points) were run down in the month (likely the result of some lingering oversupply)
- Three of the eight sub-sectors expanded in October (three month moving averages) and one sub-sector was stable. Printing & recorded media (56.8 points) continued growing while petroleum & chemical products (55.4 points) continued a long run of expansion and machinery & equipment (54.1 points) expanded again. Food & beverages (50.4 points) lost some steam but remained stable. Metal products (47.2 points) slipped back into contraction, while textiles & other goods (32.5 points), wood & paper (38.8 points) and non-metallic minerals (45.3 points) moved further into contraction
- Comments from manufacturers in October indicate that weather conditions may have stifled activity in some regions
- Stronger exports and increasing local market shares (import replacements) are boosting activity for many, but input cost pressures are continuing and some manufacturers cite difficulties in passing on price increases
- Construction projects in NSW are boosting activity in that state but a lack of large projects and slower Australian mining construction continue to drag on activity elsewhere, with intense competition to supply a smaller number of projects
- High electricity prices and supply problems significantly affected some manufacturers in South Australia
