Manufacturing continues to grow in May

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May PMI results gallery The machinery and equipment manufacturing sub-sector continues to show strong growth. May PMI results gallery

The Australian manufacturing sector recorded its eighth consecutive month of growth in May, according to the Ai Group’s performance of manufacturing index (Australian PMI).

The index gave an overall reading for the sector of 54.8, with readings above 50 indicating growth. Although good news, the rate of expansion is actually 4.4 points lower than last month, which suggest growth is still happening but at a slower pace.

The Ai Group says all sub-sectors of the index recorded growth apart from the textiles, clothing, furniture and ‘other manufacturing’ sub-sectors which continue to struggle.

Within each sub-sector the activity sub-indexes indicated new orders, deliveries, employment and stocks all recorded readings above the 12-month average.

The group says the overall news is still positive as manufacturing appears to be recovering from the loss of the auto industry. In particular the machinery and equipment sub-sector shows strong growth.

"Manufacturers reported further gains in May building on growth in the previous seven months," Ai Group chief executive Innes Willox says.

"Demand is relatively elevated for most sub-sectors and employment, sales and new orders are all growing, albeit at more subdued rates. Exports remain a key source of growth with many manufacturers strongly focused on growing their sales overseas despite stiff global competition.

"Regardless of the shrinking local auto industry and generally low business investment, the important machinery and equipment manufacturing sub-sector again built on what has been an impressive recovery after an extended slump," Willox continues.

 

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