Australia’s manufacturing sector has edged back to growth in October, according to the latest Australian Performance of Manufacturing Index (PMI) figures.
The monthly index, compiled by the Australian Industry (Ai) Group, jumped 1.1 points to record a monthly reading of 50.9 (readings above 50 indicate growth).
The Ai Group says the news is welcome after recent months of decline.
“The lift of the Australian PMI into growth territory, while only by the narrowest of margins, is nevertheless positive news after the inventory-related adjustment of a couple of months ago,” Ai Group chief executive Innes Willox says.
“Stronger exports, domestic sales and new orders in October are encouraging although growth remains relatively narrowly based, with contractions in the important metal products and non-metallic minerals sub-sectors broadly offsetting expansions,” Willox says.
Three of the index’s eight sub-sectors recorded expansion in October. They were printing and recorded media (down six points to 56.8), machinery and equipment (up 1.3 points to 54.1) and the petroleum and chemicals sub-sector (up 2.7 points to 55.4).
Offsetting the strong increases were some concerning drops in other sub-sectors. The textile and other goods sub-sector was down 7.9 points to finish at 32.5 and wood and paper products down 9.8 points to 38.8 points.
The index also showed the selling prices sub-index had moved into contraction (down 4.4 points to 47.9) at the same time as input prices (up 6.3 points to 66.3) and wages (up 2.1 points to 59.0) went up, meaning manufacturers are having to pay more for labour and other costs while the price they can sell at is falling.