Manufacturing expansion eases

Not that it was big to begin with but at least we’re still positive:

Here’s the details:

Manufacturing activity increased again in February, albeit at a slightly slower pace than a month ago. The seasonally adjusted Australian Industry Group-PwC Australian PMI® fell 0.3 points to 51.3. (Readings above 50 indicate an expansion in activity,with the distance from 50 indicative of the strength of the increase.)

■ The increase in manufacturing activity was largely attributed to significant expansions in the clothing and footwear and transport equipment sub-sectors, which more than offset considerable contractions in the wood products and furniture; paper, printing and publishing; fabricated metals; and miscellaneous manufactures sub-sectors.
■ While new orders picked up in February, survey respondents remained cautious about the outlook, citing softer demand, the strong Australian dollar, the impending carbon tax and import competition.
■ Wages and input costs continued to rise in February, while the decline in selling prices persisted, pointing to a narrowing of manufacturing profit margins.
■ Western Australia recorded the strongest expansion in manufacturing activity.

In the components, it was all about clothing and transport:

So it looks like we’re finally getting some flow through from the mining boom. And not only that, there was a solid jump in new orders and a big jump on export orders:

Fantastic news, that. Who knows, perhaps we are seeing some adaptation to the higher dollar, though I remain cautious after just one release.

Interestingly, the Australian PMI appears now to be outperforming just about everyone else, with exception of the US. Getting a few scared cows slaughtered this morning!

PMI February 2012


  1. Agree, cautiously optimistic, adaptation and transition in the making?

    Just image if RBA and Treasury are right. Totally the Lucky Country.