Australian manufacturing remains buoyant

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Australian manufacturing remains buoyant  Australian manufacturing remains buoyant

Australian manufacturing has grown for its sixth straight month in March, according to the Australian Performance and Manufacturing Index (Australian PMI).

Though down 1.8 points on the previous month, the sector registered a respectable 57.5 points for the month of March.

"The recovery in Australian manufacturing continued to build in March with another month of expansion in sales, production, employment and exports," says Innes Willox, chief executive of index creator Australian Industry Group (Ai Group).

"With new orders also growing strongly, the immediate outlook is for further and very welcome expansions in the manufacturing sector," he says. "The momentum in the sector is unambiguously good news for manufacturers, their employees and for the broader economy."

More impressive still is that all seven activity sub-indexes in the PMI expanded in the month of March.

Expansions in new orders (up 2.0 points to 62.6) and sales (up 2.4 points to 57.7) were reinforced, and inventories grew steadily for March (up 7.2 points to 55.5). Production continued to expand, however it has slowed from February’s results (down 7.7 points to 57.6).

In addition, employment (down 3.4 points to 54.1), deliveries (down 3.4 points to 52.9) and exports (down 5.9 points to 51.1) all slowed in growth from the previous month.

Furthermore, five of the eight sub-sectors in the PMI expanded in March, while two contracted and one was broadly stable.

The strongest growth in the sub-sectors was non-metallic mineral products (up 1.1 points to 64.8) and food and beverages (up 1.6 points 63.4).

Another positive sign the report shed light on is that despite the exit of the automotive industry in Australia, metal products (up 2.6 points to 59.5) and machinery and equipment (up 0.9 points to 60.5) continued to grow in March.

Chemical and petroleum products remained stable (up 1.1 points to 50.9) however textiles and clothing (down 1.1 points to 45.2) and printing and recorded media (up 2.5 points to 48.5) continued to shrink in growth.

Comments from manufacturers regarding the most recent results indicate that demand continues to recover due to positive factors such as higher coal and commodity prices, large infrastructure projects, the NBN rollout, stronger defence spending and stronger activity in the agricultural sector.

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