Manufacturing in Australia gained momentum in November according to the latest Australian Performance of Manufacturing Index (PMI) results.
The monthly index compiled by the Australian Industry Group (Ai Group), grew by 3.3 points in November to 54.2, indicating a more convincing expansion across the sector after the stagnant conditions of recent months.
The report showed growth in three of the eight sub-sectors of the index, with the food and beverages sector leading the pack with a jump of 6.1 points to 56.5. The machinery and equipment sub-sector continued its recovery with a reading of 54.9, an increase of 0.8 points and the petroleum and chemical sector up 1.7 points to 57.1 points.
“The manufacturing sector continued to rebound after the weakness seen a few months ago,” Ai Group chief executive Innes Willox says.
“A particularly positive sign is that recovery in the important machinery and equipment sub-sector extended into its third month.
“If this translated into a more substantial pick-up in business investment over the next few months, it would go a long way to making up for some areas of weakness including in the metal products sub-sector, which continues to be buffeted by global oversupply,” he adds.
Below the sub-sectors, six of the seven sub-indexes in the Australian PMI expanded in November, headed by a strong lift in new orders (up 4.8 points to 59.5) and solid growth in sales (down 1.5 points to 53.5). Exports (down 0.1 point to 55.9) continued to provide a source of growth for manufacturers.
Input prices eased but remained elevated (down 3.8 points to 62.5), while the selling prices sub-index moved back into expansion in November (up 3.6 points to 51.5). Although this is good news, manufacturers were still reporting difficulty passing on the input cost increases.
Read the full November Australian PMI results here