The Australian manufacturing sector has recorded its ninth consecutive month of growth in June according to the latest Performance of Manufacturing Index (PMI) results.
The index, compiled monthly by the Ai Group, rose 0.2 points to register 55 points for the month, with readings above 50 indicating growth.
The results showed that seven of the eight manufacturing sub-sectors continued to expand in June, with only the textiles, clothing, furniture and other manufacturing sub-sector declining.
“The manufacturing sector closed the financial year by extending its unbroken expansionary run to nine months,” Ai Group Innes Willox says.
“Sales, exports and production all lifted and growth was widespread across the sector. Higher activity in the metal products; machinery & equipment; petroleum, coal, chemical & rubber products; and non-metallic mineral products sub-sectors augmented the further growth of the large food & beverages sub-sector.”
The report also highlighted some areas for concern, with the selling price sub-index dropping 9.1 points while input prices grew 1.1 points. In essence, it is costing more and more to manufacture products that are selling for less and less.
The Ai Group also raised the issue of energy prices and government energy policy and their impact on the manufacturing sector.
“While a lift in new orders indicates that momentum may continue in the near-term,” Willox says.
“Concerns about the impacts of further rises in energy prices are accumulating like storm clouds over the sector and particularly for more energy-intensive industries.
“With policy uncertainties inhibiting investment in energy and in energy-using sectors, it is imperative that sensible and bipartisan resolution be reached as soon as possible,” Willox continued.