The Australian Industry Group (AIG) has released its Performance of Manufacturing Index (PMI) for September, which revealed an accelerating contraction in manufacturing activity, with the index declining by 0.8 to 46.5 (a score below 50 means that activity is contracting):
– Respondents to the Australian PMI® indicated that despite a welcome depreciation in the Australian dollar since early September, it remains high and continues to support intense import competition and weigh heavily on exports. The winding down of Australian automotive assembly and the ongoing downturn in mining construction activity are also affecting demand for locally-made products and components.
– Across the eight manufacturing sub-sectors in the Australian PMI®, only the large food and beverages (54.9 points) and the smaller wood and paper products (63.2 points) sub-sectors expanded in September. All other sub-sectors remained in contraction (i.e. below 50 points).
– All of the activity sub-indexes, except for supplier deliveries, were below 50 points (i.e. signalling contraction) in September. Manufacturing exports deteriorated significantly this month to be at their lowest level since April 2013.
The internals were mixed, with sales, exports, new orders and production all deteriorating, but employment and deliveries improving:
