Major survey finds manufacturing sentiment “improving following the gloom” of last two years

The quarterly ACCI-Westpac Survey of Industrial Trends has shown the manufacturing industry “showing signs of recovery” and a result indicating “gradual gains in new orders and stable, positive output growth.”

According to a statement from the Australian Chamber of Commerce and Industry on Tuesday, sentiment appears to be “improving following the gloom of the past two years”.

The Actual Composite result in the survey rose to 51.6 from 50.8 in the March quarter, with a gradual improvement in new orders and “stable, but positive, output growth” underpinning the result. 

Another indicator, the Expected Composite, grew from 55.6 to 59.3, showing an “expectation that new orders will grow strongly” in the third quarter, “leading to an increase in manufacturing output, employment and overtime.” 

Fifty-two per cent of companies surveyed expected profitability to improve over the next 12 months, with 16 per cent tipping a decline.

“The recovery is still in its early stages, but the trend is encouraging,” said Westpac Economist Ryan Wells in a statement.

Renewed optimism “is also reflected in the broader business outlook,” he added. 

“The number of firms anticipating an improvement in business conditions over the next six months now exceeds those expecting a deterioration by a net 22 [per cent], a sharp turnaround from the deep pessimism seen at this time last year.

“This is an encouraging result, especially considering the global uncertainty and trade tensions. For now, Australia has remained a relatively small target of U.S. tariff policy, providing some stability for local manufacturers.”

Andrew McKellar from the ACCI added that average unit costs are no longer rising, but are still high, and wage pressures remain.

A breakdown of the figures can be accessed here.

Picture: credit Department of Defence