MANUFACTURING experienced subdued growth in activity for the fourth consecutive month in April, with the Australian Industry Group – PricewaterhouseCoopers Australian Performance of Manufacturing Index (Australian PMI®) rising slightly by 0.4 points to 52.7.*
Key findings showed that manufacturers continue to feel the impact of higher interest rates, easing global growth and the high Australian dollar combined with a lack of skilled labour, higher raw material costs and increasing competition from Chinese companies making an impact on the local sector.
Australian Industry Group (Ai Group) Chief Executive, Heather Ridout, said the conditions facing the manufacturing sector continue to constrain growth.
“Growth in manufacturing activity was lacklustre again in April albeit characterised by a mixed performance, with some sectors doing better than others and mining and infrastructure development in particular putting a floor under activity.”
“Weaker global growth is clearly creating more uncertainty, together with the impact of interest rates and higher input costs. Manufacturers are waiting for something to happen and are uncertain about when solid growth is going to reassert itself,” Ridout said.
PricewaterhouseCoopers Global Leader of Industrial Manufacturing, Graeme Billings, said that the Australian PMI® result for April shows that the outlook for manufacturing profitability in 2008 is a tough one.
“Rising input cost pressures – notably in terms of energy and labour costs and the uncertainties around the outlook for interest rates due to ongoing inflationary pressure – will all put pressure on manufacturer’s profitability.”
“There is currently little sign of these pressures easing and ongoing attention to raising productivity and cutting operating costs will be critical during 2008 and beyond,” Billings said.
*New monthly seasonal adjustment factors were applied in April, affecting time series data of the Australia PMI® in previous months.