It’s the never-ending recession for manufacturing:
The latest Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) declined by 0.9 points in January, to 46.7 points (seasonally adjusted). The Australian PMI® has now contracted for a third consecutive month (readings below 50 points indicate contraction) and the index had expanded in only two months (immediately after the 2013 Federal election) since June 2011.
All of the Australian PMI® sub-indexes remained below 50 points this month, indicating contraction. The pace of contraction was strongest for the stocks and production sub-indexes. The exports sub-index improved in January but remains very weak.
Across the sub-sectors, the food and beverages manufacturing sub-sector expanded again in January, though at its slowest pace since July 2013 (three month moving averages). Meanwhile, the petroleum, coal, chemicals and rubber products sub-sector index expanded (readings above 50 points) after two months of contraction, and non-metallic mineral products expanded for the first time since September 2011. In contrast, metal products and machinery and equipment manufacturing continued to contract in January (in three month moving average terms).
Comments from survey participants generally indicated that conditions remain fragile within local manufacturing, with many businesses pointing to an ongoing lack of demand, new orders or exports.
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.
