The manufacturing industry expanded for a fourth consecutive month in October, albeit only marginally. The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI® ) declined by 1.9 points to 50.2 points (readings above 50 points indicate expansion) (seasonally adjusted).
§ This month’s result is only very mildly positive, suggesting stability rather than meaningful growth across Australia’s manufacturing sectors.
§ October marked the 4th consecutive month in which the Australian PMI® was above 50.0 points (net expansion). This was the longest run of expansionary readings since July 2010.
§ Four of the eight manufacturing sub-sectors in the Australian PMI® expanded in October. § Among the seven activity sub-indexes, only exports (55.0 points) and supplier deliveries (51.3 points) were firmly positive and indicating expansion. The other five activity subindexes hovered just above or below 50.0 points in October, broadly indicating stability.
§ This year, October included an extra public holiday in Victoria for the first time and confirmed at short notice. This disrupted many manufacturers’ production and sales plans nationally. The disruption was compounded due to the timing of this holiday, just before public holidays in other states the following week. Respondents to the Australian PMI® indicated this affected their normal operations and delayed production, with affected manufacturers working extra shifts to meet pre-arranged schedules.
§ Other factors affecting manufacturers in October included the low dollar and better local confidence (both positives), but a rather mixed pipeline of new customers and new orders.
Not a great report but some positives still flowing from the buck and the trend to firmer conditions from the 2013 low remains intact. Full report.
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.
The manufacturing industry expanded for a fourth consecutive month in October, albeit only marginally. The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI® ) declined by 1.9 points to 50.2 points (readings above 50 points indicate expansion) (seasonally adjusted).
§ Four of the eight manufacturing sub-sectors in the Australian PMI® expanded in October. § Among the seven activity sub-indexes, only exports (55.0 points) and supplier deliveries (51.3 points) were firmly positive and indicating expansion. The other five activity subindexes hovered just above or below 50.0 points in October, broadly indicating stability.
