Manufacturing shrunk in November, says AIG PMI figures

The Australian Industry Group – PwC Australian Performance of Manufacturing Index shows that the industry shrunk in November.

The index’s results showed a drop of 1.6 points for last month, with a decline in new orders and persistently tough conditions affecting the score. A score below 50 equals no change in the seasonally adjusted index.

"In each of the past eight months the production, employment, exports and new orders sub-indices have all declined,” said Innes Willox, the CEO of the Ai Group.

“Over the same period wages and non-wage costs have risen while there has been downward pressure on selling prices.  With the new orders sub-index down once again in November, the pressures on the industry look set to continue.”

As with the October's result, the new orders sub-index recorded a poor score, with a November reading for the sub-section of 43.5.

Of every manufacturing subsector, only food and beverage recorded growth, posting a score of 50.7. Every state saw a shrink in manufacturing

Willox said high energy costs, the high Australian dollar and soft demand continued, and cuts to interest rates had not offset the continuing gloom in commercial construction. He stated that further interest rate cuts are needed.

The Reserve Bank of Australia is expected to cut rates when it meets for the last time in 2012 tomorrow.