Wages and investment in the manufacturing sector are continuing to fall, with the industry seeing no benefit from a spate of interest rate cuts, new figures show.
According to the ACCI Westpac survey of industrial trends, conditions in the manufacturing sector have not improved on previous months.
“Investment intentions in the manufacturing sector remain weak,” the report said.
“Plant and equipment and building intentions were both scaled back again during the past three months.
“The December quarter capex survey concurs with this result, signalling that a marked decline in investment in the sector is underway.”
Selling prices in the sector are also on the slide, and the survey revealed most businesses were losing pricing power.
“Contrary to expectations, only five per cent of all respondents were able to increase prices, while 79 per cent were forced to keep them unchanged,” the survey said.
“In contrast 27 per cent of respondents reported increased costs, explaining the ongoing disappointing profit performance.”
On a brighter note the Westpac survey indicated manufacturers had lifted profit expectations for the coming quarter, but analysts said the improvement may have come at the cost of lower wages.
And while profit expectations may have risen slightly, Westpac said the forecasts were still “well below average levels”.
You can read the full report here.