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Australian manufacturing expands in November

December 2, 2014 • News

Australian manufacturing has entered into expansionary territory in November for the first time since July as sales, new orders and deliveries all improved in an environment of increasing import competition.

Image credit: freedigitalphotos user: by jscreationzs

Image credit: freedigitalphotos
user: by jscreationzs

According to Reuters, the Australian Industry Group’s (Ai Group)Performance of Manufacturing (PMI) has increased 0.7 points to 50.1 in November, indicating slight expansion across the sector.

Two of the five sub-indexes were above the 50 mark this month, with new orders rising by 3.1 points to 54.3 and supplier deliveries climbing 7.2 points to 52.1. Production, stocks and export sub-indexes all dropped below the 50 threshold, which separates expansion from contraction.

The survey also found that manufacturing employment and sales continued to contract, whereas four of the eight manufacturing sub-sectors have expanded in November, including large food, beverages and tobacco (up 2.4 points to 59.1 points) and the smaller wood and paper products (up 2.1 points to 61.6 points).

According to Global Post, conditions have also improved in textile, clothing and furniture, (up 7.3 points to 54.4) and non-metallic mineral products (up 5.0 points to 50.2).

Ai Group Chief Executive Innes Willox said the improvement in Australia’s manufacturing activity was slight but significant.

“The lower Australian dollar, an easing in energy costs, moderate wages growth and relatively low interest rates are all helping to underpin the sector’s performance,” Mr Willox said.

“Demand for locally made inputs and components flowing from stronger residential construction activity is also a positive for the sector.”

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