Australia - AIG Performance of Manufacturing index for August

Up 1.3points to 51.7

Key Findings:

  • Expanded for a second month in August ... first time this has happened since October 2013

Three of the eight manufacturing sub-sectors expanded:

  • food, beverages & tobacco (down 4.7 points to 54.2);
  • wood & paper products (up 1.8 points to 70.0);
  • and textiles, clothing, footwear, furniture & other manufacturing (up 6.0 points to 55.2)

Contractions:

  • Petroleum, coal, chemical & rubber products (down 2.4 points to 48.3) returned to contraction after a brief expansion in July
  • Machinery and equipment (up 0.8 points to 41.3)
  • Metal products (unchanged at 43.3)
  • Non-metallic mineral products (down 2.1 points to 42.0)
  • Printing & recorded media was broadly stable (down 0.5 points to 49.5)

Four of the seven activity sub-indexes expanded in August:

  • New orders (up 3.0 points to 52.9);
  • production (down 3.0 points to 51.2);
  • supplier deliveries (up 2.4 points to 53.0);
  • and manufacturing employment (up 3.7 points to 51.3)

Contractions for the sub-indexes:

  • Manufacturing sales returned to contraction (down 5.3 points to 48.6)
  • Stock levels (up 0.5 points to 48.4) reduced for a seventh consecutive month
  • Manufacturing exports (down 7.1 points to 44.8) ended three months of expansion

More:

  • Input prices sub-index climbed 4.7 points to 67.7 as the lower dollar raised prices for imported inputs
  • Wages sub-index was almost unchanged at 64.3
  • Manufacturing selling prices fell 4.0 points to 48.3 to reverse July's brief expansion, indicating the ongoing downward pricing pressures from weak local demand

Comments from Ai Group Chief Executive, Innes Willox. Bolding is mine:

  • "A second month of expansion is encouraging for Australian manufacturing.
  • It is also positive for the economy overall which requires a broader base of growth as the mining investment boom continues to unwind.
  • The expansion indicated by the rise in the Australian PMI in August was driven by greater production, employment and new orders.
  • Manufacturers are hoping that these positive directions are built upon in coming months and are sufficiently strong to overcome continued headwinds from the reduced orders for materials and equipment from the mining sector and automobile producers"