Oz manufacturing continued its decline in December.
The contraction in manufacturing continued for a tenth consecutive month in December according to the latest Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®). The revised index was unchanged at 44.3 in December (readings below 50 indicate a contraction in activity with the distance from 50 indicative of the strength of the decrease).
No sub-sectors expanded in December. New orders were weaker in the month (45.7) while input prices continued to rise (60.6).
Australian Industry Group Chief Executive, InnesWillox, said: “The December Australian PMI®continues to reflect the influences of weak global demand and a softening Australian economy which impacted the sector throughout 2012. As well, a high Australian dollar and higher costs, particularly for energy due to the impacts of the carbon tax and, in some states, the costs associated with investment in network infrastructure, have all taken their toll on margins and activity. The pressures are widespread across the industry and in December no manufacturing sub-sector recorded an expansion in activity. Forward orders continue to track weakly suggesting demand has not yet turned the corner. The recent rate cuts by the Reserve Bank are yet to offset the range of factors adversely impacting the industry and further reductions are likely to be needed over the next few months,” Mr Willox said.
Australian PMI®: Key Findings for December:
- The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) recorded a reading of 44.3 in December – unchanged from the previous month after the November reading was revised upwards slightly as a result of a statistical reweighting of the manufacturing sub- sectors (readings below 50 indicate a contraction in activity with the distance from 50 indicative of the strength of the decrease).
- Activity in all of the eight revised manufacturing sub-sectors decreased in December.
- Inventories were down in the month (39.5).
- Selling prices received for manufactured products were lower in December (43.0).
- Survey respondents remained cautious about the outlook citing a range of growth inhibitors including softer demand, higher energy charges, stronger import competition and the strong Australian dollar.
