▪ The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI® ) jumped by 5.6 points to a record high of 63.1 points in March, indicating a faster rate of expansion in March compared to February (seasonally adjusted). Results above 50 points indicate expansion with higher results indicating a stronger expansion.
▪ The previous record high for the Australian PMI® was 62.1 points in May 2002. March 2018 marked an eighteenth month of expanding or stable conditions for the Australian PMI® and the longest run of continuous expansion since 2005.
▪ All seven activity sub-indexes in the Australian PMI® expanded in March, with the new orders, employment and delivery sub-indexes all recording record highs.
▪ Seven of the eight sub-sectors in the Australian PMI® expanded and one was stable in March (trend). Three of the eight sub-sectors reached record highs including petroleum, coal, chemical and rubber products; metal products and machinery and equipment subsectors. Weaker conditions remain evident in the small but diverse textile, clothing & other manufacturing sub-sector.
▪ Capacity utilisation reached a record high of 81.2% of available capacity in March. New orders have also very strong so far in 2018, suggesting that some manufacturers will need more investment and/or employment in order to meet future growth in demand.
▪ Queensland manufacturing is performing particularly well in 2018, with 73.8 points in March and a record in January 2018 of 74.6 points (seasonally adjusted). Manufacturers in Queensland are reporting increased demand for equipment, machinery and other inputs from a broad range of sectors including the construction, mining, agriculture and renewable sectors.
Perhaps a few of those shed cars workers will get jobs.
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.
