Manufacturing bounces back in October, according to report

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Image credit: www.aigroup.com.au

The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI) expanded for the first time since July, having increased by 9.6 points to 56.3 in October.

According to Ai Group’s latest survey, Australia’s manufacturing industries grew solidly in October with production, employment, sales and exports all moving convincingly into growth territory.

Leading the way was the large food & beverages sector (up 2.0 points to 61.6), with strong contributions from machinery & equipment sector (up 0.4 points to 53.9) and with support from firmer growth in the textiles, clothing, footwear, paper & printing group (up 2.1 points to 53.7).

Among the six manufacturing sectors in the Australian PMI contraction was evident in the metal products (up 0.6 points to 47.4) and building materials (up 2.6 points to 46.1) sectors, while the chemicals sector was broadly stable (up 2.3 points to 50.9).

Ai Group Chief Executive Innes Willox said the jump into expansion was driven by large improvements in New South Wales, which rose into expansion, and Victoria, which remained in contraction but improved from a deep contraction in September.

“With the quantity of fiscal support easing in October and with the tax cuts only just starting to flow through, the lift in sales and the strong growth of new orders are particularly encouraging signs of improving household and business confidence,” Mr Willox continued.

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“The solid national performance was achieved despite another month of contraction in Victoria. With restrictions in Victoria being lifted there are very good prospects of further strength in the closing months of 2020.”

Image credit: www.aigroup.com.au
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