Food and beverage a bright spot in poor PMI result

The month of growth in Australian manufacturing has passed, and the sector resumed contracting in June.

The Australian Industry Group’s Performance of Manufacturing Index survey recorded a result of 44.2, down from May’s 52.3. The previous result was a break from five previous months of negative results.

Any result under 50 indicates contraction.

Of seven sub-indices, only export was in expansion, assisted by the lower dollar.

The Food, Beverage and Tobacco sector enjoyed its 13th straight month in expansion territory, achieving a result of 60.5. The Wood and Paper and Textiles, Clothing and Footwear sub-sectors were also in growth.

Overall, however, factors such as the wind-down of automotive assembly and poor domestic demand meant that the result was not a strong one.

“Further declines in mining and other business investment in machinery and equipment, and a still subdued economic outlook, are weighing more heavily on the manufacturing sector than any positive effects of the Federal Budget and recent interest rate cuts,” said the Ai Group’s chief executive, Innes Willox, in a statement.

 

Image: Philippe Huguen: AFP