Australian Industry Group Performance of Manufacturing Index
An 8.1 point jump in the month
To its highest since May of 2002
Key points from AiG:
- fifth consecutive month of expansion
- Six of the seven activity sub-indexes expanded in February (seasonally adjusted)
- Encouragingly for the outlook, new orders (60.6 points) and sales (55.3 points) grew strongly. Production jumped from stable conditions in January to a strong expansion (65.3 points), as did employment (57.5 points). Deliveries lifted out of contraction (56.3 points) while exports strengthened further (57.0 points). Reflecting this surge in demand, inventories contracted mildly in the month (48.3 points).
- Seven of the eight sub-sectors improved in February (trend)
- Food & beverages posted a strong result (58.8 points), as did non-metallic mineral products (66.3 points) and machinery & equipment (60.1 points), all building on expansions in January. Metal products (56.1 points) and petroleum, coal & chemical products (53.0 points) continued expanding well, while wood & paper products recovered from contraction (51.9 points). Only printing & recorded media remained in the doldrums (45.1 points).
- Comments from manufacturers in February indicate that demand looks to be increasing and confidence returning to some of the larger sub-sectors such as food processing and machinery and equipment (other than auto).
- Exports are continuing to provide a good source of growth, as are large transport infrastructure projects and increased activity in parts of mining and agriculture in response to the recovery in prices for bulk commodities, wool and some grains.
- On the inputs side, energy costs and energy reliability are posing a significant threat to ongoing profitability and viability for some manufacturers. Rising raw materials costs and supply constraints are causing increased price pressure and delaying some supplies. Also, intense competition is continuing, particularly from overseas firms.
The big data event in Australia today is Q4 GDP, due at 0030GMT
- expected +0.8% q/q, prior -0.5%
- expected +2.0% y/y, prior +1.8%
- More: Australia - Where them GDP forecasts at? and Australia recession? AAA rating risk? ... What, me worry?