Manufacturing up as exports surge: PMI
Manufacturing activity picked up in August, a survey of Australian companies suggests, as exports for the industry hit a ten-month high.
"While it is only expanding at a modest pace, the further growth in manufacturing in August is heartening and, together with a rise in new orders, will help allay fears of a further slowdown in business conditions," Ai Group chief executive Innes Willox said after the release of Australian Performance of Manufacturing Index on Monday.
The overall PMI was up 1.8 points to 53.1 in August, above the 50-point mark that separates expansion and contraction in activity, after a 1.9 per cent rise in July.
The trend numbers suggested the machinery and equipment sector was only segment to advance its rate of expansion during the month, with production and new orders increasing amid a boost in demand from mining companies and the military.
The large food and beverages sector, which has been continually expanding since June 2012 and helping prop up the PMI results, gained again in August but recorded its slowest rise since November 2016.
"Exports have been particularly strong for this sector in recent months but some respondents reported weaker domestic sales in August and higher raw material costs due to the drought," the PMI report said.
The results suggested a sharper contraction for metals manufacturers - stung by a drop-off in home construction rates - as well as the small textiles and paper products sector, with both groups reporting their weakest conditions since 2013.
The survey indicated overall exports of manufactured goods increased during the month, hitting the highest level since October 2018.
"Overseas demand for Australian manufactured products remains strong, particularly for consumable manufacturing products," the report said.
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