Australia’s manufacturing sector returned to expansion in November, supported by rising new orders and production, according to the latest PMI data from S&P Global.
The headline seasonally adjusted S&P Global Australia Manufacturing Purchasing Manager’s Index (PMI) rose to 51.6 in November from 49.7 in October, moving above the 50.0 no-change threshold and signalling improved sector conditions after a brief slowdown. The rate of expansion was the strongest since August.
“The Australia Manufacturing PMI showed that the goods producing sector returned to growth in the penultimate month of the year. While modest, the pace of improvement was the quickest in three months, driven by fresh increases in both new business and output,” said Jingyi Pan, Economics Associate Director at S&P Global Market Intelligence.
In a news release, S&P Global stated that data indicated that the first rise in new orders since August was accompanied by higher production levels.
Business optimism also improved, with manufacturers citing expansion plans and expectations of better economic conditions as drivers of anticipated sales growth.
Employment levels rose in November as producers added staff to manage both current and expected production increases. Backlogs of work fell for the seventh consecutive month, reflecting the sector’s efforts to manage rising demand.
Purchasing activity edged higher, although stocks of purchases fell at the fastest rate in nearly a year amid persistent supply delays. Firms reported that supply shortages, shipping disruptions, and port congestion contributed to the longest delivery times since December 2024.
“Supply conditions remained challenging, however, with goods producers facing the worst lengthening of delivery times since last December amid supply constraints, shipment delays and congestions at ports. That said, prices were not immediately impacted as rates of inflation eased in November,” Pan added.
The report found that input cost inflation slowed, contributing to the weakest increase in selling prices over the past year.
Despite rising demand, the data shows manufacturers reported difficulties in passing higher raw material and shipping costs on to clients amid competitive market conditions.
