Manufacturing sector growth slows in April

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  • Plant & Equipment

The wood & paper products sub-sector strengthened by 0.8 points to 65.8 in April. The wood & paper products sub-sector strengthened by 0.8 points to 65.8 in April. The wood & paper products sub-sector strengthened by 0.8 points to 65.8 in April.

The Australian manufacturing sector continued to expand in April, though at a slower rate than before.

The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI) shows that, having hit a 12-year high in March, the sector dropped 4.7 points to 53.4.

Readings above 50 indicate expansion in activity and the distance from 50 indicates the strength of the increase.

"The current expansion in manufacturing is a much-needed turnaround for a sector that has been through a very tough decade," Ai Group chief executive Innes Willox says.

"While margins remain tight, recovering domestic market share and building momentum in a variety of export markets provide a strong foundation for the lift in confidence required for the sector to move up another gear."

All of the seven activity sub-indexes expanded except employment (down 4.2 points to 49.0).

Production (down 3.2 points to 56.8), sales (down 2.7 points 56.8) and stocks (up 2.0 points to 56.7) all expanded strongly, the index report says, while new orders maintained mild expansion, but at a slower pace (down 9.6 points to 52.4).

"As in March, five of the eight manufacturing sub-sectors expanded (that is, above 50 points in three-month moving averages)," the report says. "The large food, beverages & tobacco sub-sector continued to lead the way, adding 3.1 points to reach a record high of 74.1. Wood & paper products also strengthened (up 0.8 points to 65.8), as did non-metallic mineral products (up 7.0 points to 57.5)."

On the negative site, the machinery & equipment sub-sector moved back into contraction in April (down 3.1 points to 47.8) after a March recovery.

The input prices sub-index fell by 6.4 points to 57.3, which the Ai Group says suggests an easing in input price growth related to the recent appreciation of the Australian dollar.

"The manufacturing selling prices sub-index continued a downward trend," it says, "slipping 2.7 points to 45.1. This reflects manufacturers’ efforts to combat increasing competition from international players."

 

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