Manufacturing News

Australian manufacturing on the road to recovery

Manufacturing activity grew for the fourth consecutive month in November, according to a recent survey by the Australian Industry Group.

The PricewaterhouseCoopers Australian Performance of Manufacturing Index reported growth remained relatively steady, down 0.5 points to 51.2, still above the 50 point mark separating expansion from contraction.

The modest expansion reflects the sluggish growth in new orders and a fall in inventories.

Ai Group Chief Executive, Heather Ridout, said the PMI suggests manufacturers remain cautious and despite a lift in new orders in recent months, they are not convinced that conditions justify rebuilding their inventories.

Despite the encouraging figures, industry leaders warn of a long road ahead for the manufacturing industry.

“The strength of the Australian dollar is proving to be an important barrier to stronger recovery, adding to the need for caution in raising interest rates,” Mrs Ridout said.

PricewaterhouseCoopers Global Head of Industrial Manufacturing, Graeme Billings, added that manufacturers’ profit margins were still under severe pressure despite improvements in recent months.

“The lift in growth in wages and input costs in November, at the same time as selling prices continue to fall, will require a renewed focus on cost management and continued emphasis on lifting productivity.”

Clothing and footwear, construction materials and transport equipment were among the sectors that experienced growth but activity fell solidly in the paper, printing and publishing, and basic metal sectors.

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