Manufacturing grows over January period

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Manufacturing growth has consolidated in January, according to the Australian Industry Group (Ai Group).

Ai Group’s Performance of Manufacturing Index (Australian PMI) has expanded for a fourth consecutive month, to a reading of 51.2 in January. This figure is down 4.2 points from December 2016 (figures above 50 represent an increase in manufacturing, with the distance from 50 representing the strength of the increase). 

Other findings from Ai Group’s Index include a decrease in supplier deliveries (own 5.4 points to 47.0) and sales (down 11.2 points to 47.6). These figures represent potential softer demand for manufacturing components in 2017.

On a positive note, machinery & equipment (up 0.4 points to 57.5) and non-metallic mineral products (up 4.8 points to 65.9) increased their rate of expansion from December.

Ai Group chief executive, Innes Willox, said that a number of trends changed over the December-January period.

“Conditions for Australia’s manufacturers remained positive in January despite easing from December’s end-of-year surge. While domestic sales slipped and there was a build-up of inventories, exports grew further in January and production was held at December’s levels,” Willox said.

“The near-term outlook for the sector as a whole was boosted by another lift in new orders. The major emerging concern – particularly among the more energy-intensive manufacturers – is the deteriorating energy price outlook which threatens to stifle the tentative recovery underway in the sector.”