An ongoing decline in new orders and production kept the manufacturing industry in the red in November, according to the latest Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®).
The seasonally adjusted index dropped 1.6 points to 43.6 in November, with readings below 50 indicating a contraction in activity.
The report revealed, food & beverages was the only sub-sector to expand in November, while Textiles, clothing & footwear; chemical, petroleum and coal products; construction materials; basic metals; and fabricated metals all recorded significant declines in activity.
Australian Industry Group Chief Executive, Innes Willox, said: “In each of the past eight months the production, employment, exports and new orders sub-indices have all declined. Over the same period wages and non-wage costs have risen while there has been downward pressure on selling prices. With the new orders sub-index down once again in November, the pressures on the industry look set to continue.”
Australian Industry Group revealed no state recorded increases in manufacturing activity in November.
“The key concerns for manufacturers remain the high dollar, rising energy costs and weak demand in export and local markets. These factors are exacerbated by the ongoing slump in the residential and commercial construction sectors and have not been offset by the reduction in interest rates to date. Mounting costs are putting manufacturing businesses under relentless pressure, adding to the case for further interest rate cuts,” Mr Willox said.