Manufacturing earnings, output signal weak conditions

A Business Spectator NAB Short Course article has argued that conditions in manufacturing remain unfavourable.

A Business Spectator NAB Short Course article has argued that conditions in manufacturing remain unfavourable.

Tony Kaye writes, “With job cuts being announced across many parts of Australia’s manufacturing sector, it’s evident that conditions remain subdued.”

The decline in manufacturing output recorded for August, recorded in the Australian Industry Group/PwC Performance of Manufacturing Index and noted here, shows weakness in building products, auto and auto parts manufacturing, and manufacturers linked to the resources sector.

Kaye notes that only three of the sub-sectors – miscellaneous manufactures, food and beverages, and wood products – grew in August. He also contends that the most recent round of profit results show conditions are, on the whole, weak.

The PMI, a "seasonally adjusted national composite index based on the diffusion indices for production, new orders, deliveries, inventories and employment with varying weights", was published on September 3, and showed that “Manufacturing conditions continue to be very challenging across the sector with the high dollar and weakness in demand in the domestic and export markets weighing on growth.” said the AiG.