The overall result of 45.2 for the seasonally-adjusted index was slightly better (by 1.1 points) than last month’s result. Any score under 50 represents a contraction.
Positives to come out of the survey were the sub-sectors of paper, printing and publishing (51.1) and transport equipment (52.5), which were the only ones that grew for October.
AiG CEO Innes Willox said that there were several factors creating a drag on the industry.
"Manufacturers continue to find the going very tough in the face of the strong dollar, weaker demand in export markets and flat conditions across the non-mining sectors of the domestic economy –particularly in commercial and residential construction which has strong linkages with domestic manufacturing,” he said in a statement.
“The current contraction in Australian manufacturing is comparable to that being experienced by manufacturers in the recession-hit Euro zone even though the Australian economy is growing relatively strongly overall.
“Spurred in part by their lower currency, manufacturing is faring more strongly in the United States despite operating in a considerably weaker domestic economy than Australian manufacturers."