The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI® ) improved by 2.3 points to 52.5 points in November, indicating a net expansion across the manufacturing industries. (Readings above 50 points indicate expansion).
§ November was the 5th consecutive month in which the Australian PMI® has been above 50 points (net expansion). This is the longest unbroken run of expansion since 2010. Six of the past seven months have had an Australian PMI® above 50 points.
§ November’s improvement saw the Australian PMI® recover from October’s deceleration in growth, to a very similar level to September. It is possible that some of the deceleration in October might have been due to an additional public holiday in Victoria, for the first time this year. This holiday was confirmed at short notice and disrupted many manufacturers’ production, distribution and sales plans nationally. The disruption was compounded due to the timing of this holiday which was held just before public holidays in other states.
§ Five of the eight manufacturing sub-sectors in the Australian PMI® expanded in November, up from four in October, with food and beverages moving back into expansion after a brief pause last month (which might have been related to Victoria’s extra holiday).
§ Positive trends identified by manufacturers in November included: the low dollar supporting exports and local orders; better local confidence; and stronger demand for suppliers to the housing construction sector. These positives were offset for others by declining automotive production, engineering projects and Government infrastructure projects.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
