Australian Industry Group Performance of Manufacturing Index, a big drop on the month to 51.2

  • prior 55.4
  • January is the 4th consecutive month for the index to come in at 'expansion', despite the fall

AIG's 'key findings' for the month's survey results 9bolding mine):

  • Six of the seven activity sub-indexes improved from November. Strong expansions in new orders (60.6 points) and sales (58.8 points) continued in December, while exports surged ahead (68.5 points), Production (58.2 points) also expanded more strongly while deliveries (52.4 points) continued to grow. Employment (47.4 points) slipped in December, in line with recently weaker jobs growth
  • Five of the eight sub-sectors expanded in December (three month moving averages). Both food & beverages (57.1 points) and petroleum & chemical products (56.5 points) continue to perform strongly. Machinery & equipment (55.0 points) is showing signs of continued resilience. Non-metallic mineral products (57.9 points) bounced back to expansionary conditions while printing & recorded media (48.3 points) slipped from stable to mild contraction. Metal products (48.0 points) and textiles & clothing (44.3 points) remained contractionary, but at a weaker pace of contraction than previously
  • Comments from manufacturers in December indicate that demand (albeit somewhat mixed) appears to be improving again after a weak patch in the latter half of 2016.
  • The recovery in commodity prices has led to better conditions for manufacturers exposed to the mining sector, with some revival of mining investment and maintenance spending. However, surging energy costs, weaker local demand and slower spending on particular major projects is depressing activity for some manufacturers.

more to come