Australian PMI: Manufacturing expands in April

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The Australian Industry Group’s Australian Performance of Manufacturing Index (Australian PMI®) rose 2.8 points to 58.5 in April, the highest monthly result since July 2021.

According to the official media release, manufacturing in Australia maintained its strong post-COVID recovery with a third consecutive month in positive territory.

“The Australian manufacturing sector continued its current expansion in April following the disruptions of late 2021 and early 2022,” said Innes Willox, Chief Executive of Ai Group the national employer association in a media release.

“The expansion is widespread with five of the six manufacturing sectors reporting improved performance in the month. Acceleration was highest in the chemicals and building product sectors. Across the broad manufacturing sector, production and domestic sales were both higher than in March although a fall in exports saw an easing in the pace of improvement in total sales.

In April, five of the six manufacturing sectors in the Australian PMI® expanded, with the TCF, paper & printing sector contracting (down 17.2 points to 41.8) after posting elevated results in March, and the big food & beverage sector rebounding after four months of contraction (up 6.3 points to 53.2). The machinery and equipment industry shrank sharply yet continued to grow (down 7.6 points to 52.6).

Five of the seven activity indices in the Australian PMI® increased (see table below), with new orders (down 0.2 points to 64.8) and sales (down 7.5 points to 56.4) slowing but still expanding strongly. The employment (down 6.3 points to 47.1) and exports (down 10.6 points to 47.7) indexes also sank below their long-run averages (49.1 points and 50.0 points respectively).

“Employment fell in the month with many respondents reporting difficulties filling positions – particularly in skilled occupations. Price pressures continue with input prices and wages both rising further in April and selling prices edging higher as manufacturers seek to recover cost increases in the market,” Mr Willox said.

“New orders increased further in April and, with many businesses feeling capacity constraints and difficulties in securing inputs and staff, the pressures on filling orders are set to continue in coming months.”

Image credit: https://www.aigroup.com.au/news/media-centre/2022/australian-pmi-manufacturing-expands-but-supply-chain-and-labour-constraints-grow/