From the AIG:
Activity across the manufacturing industry expanded in May, boosted by a lift in manufacturing exports which have benefitted from the lower Australian dollar. This followed five months of contraction in manufacturing activity. The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI® ) rose by 4.3 points to 52.3 points this month (readings above 50 points indicate expansion) (seasonally adjusted).
The Australian PMI® typically ‘leads’ ABS data for manufacturing output by around 3 months. Recent results from the Australian PMI® suggest output in manufacturing (measured as ‘value added’ by the ABS) is likely to have been broadly steady so far in Q2 2015.
Five of the seven activity sub-indexes in the Australian PMI® were above 50 points this month. Manufacturing exports expanded again in May after a brief contraction in April, mainly due to a resurgence in food and beverages exports this month. The benefits of the recently lower dollar also flowed through to other sectors, with the machinery and equipment sub-sector recording a fifth consecutive month of expansion in exports in May, despite an ongoing, pronounced contraction in overall activity levels in this sector.
Manufacturing new orders expanded after five months of contraction while production also expanded after contracting for six months. However, manufacturing sales declined for a 12th month in May, signalling ongoing weakness in local demand. Supplier deliveries also expanded in May after three months of contraction while manufacturing stock levels almost stabilised. Manufacturing employment expanded very mildly after four months of decline.
Five of the eight manufacturing sub-sectors in the Australian PMI® expanded (i.e. above 50 points) in May: food and beverages (for a 12 th month); non-metallic mineral products (mainly building materials, for a seventh month); wood and paper and printing and recorded media (both for three months); and petroleum and chemical products expanded for the first time in a year.
Manufacturing is benefiting from a lower Australian dollar, increased residential construction activity, and very low interest rates, but the rapid decline in mining construction, the progressive closure of automotive assembly, subdued local business investment in machinery and equipment, and an uncertain local outlook continue to weigh heavily on local demand.
I must be dreaming. Manufacturing up on exports growth! Full report.
