Australian manufacturing continues 2017 expansion

Manufacturing in Australia has recorded its 14th consecutive month of expansion, led by the country’s substantial food and beverage industry.

Five of the eight manufacturing sub-sectors expanded in November, according to the Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI).

However, non-metallic mineral products (mainly building materials) plunged 10.2 points and into contraction at 41.7 points in November, after expanding strongly through much of 2017.

“The manufacturing sector lifted strongly in November, building on an uninterrupted growth phase that began in October 2016,” said Ai Group CEO Innes Willox.

“Sales, production and employment all jumped ahead in November and the strong rise in new orders points to further good news as we head to Christmas.

“The resumption of growth in exports is particularly encouraging after a slight easing in momentum in recent months.”

Read: Full list – Top 100 manufacturers 2017

Input prices (up 10.2 points to 76.4 points) and wages (up 5.1 points to 64.1 points) both rose sharply in November, with manufacturers across several sub-sectors noting that soaring energy costs are damaging their profitability.

Meanwhile, the selling prices sub-index ticked up by 4.0 points to 52.2 in November, signalling that some manufacturers are passing these cost increases on to their customers.

This follows strong downward pressure on prices in the previous two months.

“The period of steady employment growth for the sector was reflected in a lift in the pace of wage growth to its highest rate in over five years,” Willox said.

“The sharp rise in input costs recorded in November is a sobering reminder of the risks posed for the manufacturing sector by climbing energy costs.”

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