The Australian Industry Group (Ai Group) Australian Performance of Manufacturing Index (Australian PMI) climbed again in August, for the second month in a row.
After rising 1.8 points above July levels, the index read 53.1 in August.
According to Ai Group, the stronger numbers were driven increasing production and rising exports.
The Australian PMI bucks the global trend of manufacturing indexes, which have been falling into negative territory, with readings below 50 indicating a contraction in activity. The global average in July was 49.3, with manufacturing powerhouse nations such as China, Japan, German, South Korea, and Taiwan among those whose indexes have fallen recently.
In Australia, building, wood and furniture manufacturing and food and beverage production led the sector, as machinery and equipment producers and petroleum and chemicals manufacturers also performed strongly. Metals and textiles and paper products reported negative conditions.
“While it is only expanding at a modest pace, the further growth in manufacturing in August is heartening and, together with a rise in new orders, will help allay fears of a further slowdown in business conditions,” said Ai Group chief executive, Innes Willox.
Looking at the index based on activity, rather than sector saw a wholly positive result, with expansion across all seven activity indexes, with an 11.6 point leap in sales, and a 6.9 jump in finished stocks. While employment dropped by 1.8 points and input prices fell by 0.1 points, both were above 50, sitting at 52.3 and 69.6 respectively.
The Australian PMI is based upon a national sample of manufacturers across all states and subsectors. Responses are weighted against ABS industry output data.
All in all, the index report demonstrates a strong start for the manufacturing sector this financial year, according to Ai Group.