While new orders rose in the month (up 2.3 points to 52.3) manufacturing production fell into negative territory (49.2). Manufacturing selling prices took a tumble falling 11.4 points. The food and beverage sub-sector continued to lift in March and was one of four sub-sectors to expand.
Australian Industry Group Chief Executive, Innes Willox said: "The latest Australian PMI shows that large parts of the economy are failing to gain traction in 2014. Subdued local demand and the newly resurgent dollar are weighing heavily against the efforts of manufacturers to rebuild their sales base in Australia and internationally.
"High local production costs and rising input prices are still major barriers for those who are trying to compete internationally and against imports in the domestic market. The Reserve Bank has signalled a more positive outlook and a hold on interest rates for 2014, but from a business perspective, the outlook is much more fragile.
"The much-anticipated housing recovery remains weak in most states, consumer spending on non-food goods and local services is muted, and business attitudes to investment and hiring remain cautious.
"In this fragile atmosphere, we need to ensure that all relevant policy settings are supportive and not hindering the rebalancing our economy requires."
Australia PMI: Key Findings for March
The latest Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI) contracted further in March with a slight drop of 0.7 points to 47.9 (readings below 50 indicate a contraction in activity).
- Manufacturing production levels slipped back into contraction falling by 2.3 points to 49.2
- New orders expanded with the sub-index lifting 2.3 points to 52.3
- Employment across manufacturing was weak with the sub-index down 2.4 points to 45.0
- Input prices (67.7) and average wages (55.2) both remained high while selling prices dropped to 39.2
- Four sub-sectors were in the black in March: food and beverages (53.4); petroleum, coal chemicals and rubber products (62.2); non-metallic minerals (66.9); and wood and wood paper products (55.6)
