Manufacturing grows for eighth consecutive month
The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) stayed in expansionary territory for an eighth consecutive month in May.
The pace of expansion eased by 4.4 points to 54.8, indicating a slower rate of growth (readings above 50 indicate expansion in activity, with the distance from 50 indicating the strength of the increase).
Ai Group Chief Executive, Innes Willox, said: "Manufacturers reported further gains in May building on growth in the previous seven months. Demand is relatively elevated for most sub-sectors and employment, sales and new orders are all growing, albeit at more subdued rates. Exports remain a key source of growth with many manufacturers strongly focused on growing their sales overseas despite stiff global competition.
"Regardless of the shrinking local auto industry and generally low business investment, the important machinery and equipment manufacturing sub-sector again built on what has been an impressive recovery after an extended slump. Less positively, slower local retail conditions are having some negative impacts for manufacturers and elevated input costs are an ongoing challenge for everyone, particularly due to rising electricity and gas costs," Willox said.
Australian PMI®: Key Findings for May:
- All seven activity sub-indexes in the Australian PMI® expanded in May (see table below), albeit at a slower rate than in April. New orders remained elevated (down 3.4 points to 58.1), suggesting the current expansion has some way to run.
- As in April, seven of the eight manufacturing sub-sectors expanded strongly in May (trend data*), with all but the textiles, clothing & furniture sub-sector (down 2.7 points to 39.4) exceeding 56 points.
- The input prices sub-index expanded at a slower rate in May (down 6.0 points to 63.8), while wages elevated a further 3.0 points to 61.4.
- The selling prices sub-index recorded a fifth consecutive month of expansion in May (down 2.7 points to 56.2), perhaps reflecting inflationary conditions but also indicating some relief to manufacturers in being able to pass on more of their cost increases.
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