Food continues to lead way as manufacturing grows for second straight month

The Australian PMI has recorded a result of 53.2 for October, an improvement on September and the second straight month of growth.

The seasonally-adjusted Australian Industry Group PMI is based on surveys of the group’s members, and a score above 50 indicates growth in the sector. The Ai Group characterised the result as “mild expansion”.

As with September, the food, beverages and tobacco sub-sector led the way, scoring 65.6, the best result since March 2012 and continuing a month-on-month expansion in the segment which began in March this year.

There was also a strong result in the petroleum, coal, chemicals and rubber products sub-sector, up to 54.1 in September.

The metal products sub-sector continues to face difficulties, and “remains close to the historically low levels seen in recent months” according to the Ai Group. It was an improved result from August’s result, but with a score of 32.5 continues to be in a period of contraction that began in August 2010.

The PMI report did, however, note that businesses were cautious about conditions, and members in comments suggested that “this improvement [in sentiment] so far weak but still noticeable.”

This caution in this last observation matches with sentiment recorded in a recent Ferret poll of the readers of Manufacturers’ Monthly and other websites in the Cirrus Media Industrials group. This poll found that almost four-fifths of respondents believed manufacturing was still in trouble or that it was too early to tell if things were improving.