Australian manufacturing experiences “surprising” rebound in March PMI

The manufacturing sector ended four months of contraction in March, according to the Australian Industry Group’s Performance of Manufacturing Index.

The survey result of 53.7 was “somewhat surprising” and “almost entirely due” to a rush on food, groceries and personal care products, according to the Ai Group. The result was a lift of 9.4 points compared to February.

Any result above 50 indicates expansion, equal to 50 equals no change, and below that indicates decline.

Manufacturers were being impacted in different ways by the current Covid-19 outbreak and mitigation measures, said Ai Group chief executive Innes Willox.

“Some are stepping up to meet surges in purchasing from consumers, businesses and the health sector. Others are finding that disrupted supply chains into export markets and from suppliers of inputs are reducing sales and stifling production,” he said in a statement on the results. 

“Others are seeing sales dry up as their customers reduce orders to reflect their own demand and supply conditions. The aggregate impact for the manufacturing sector in March was a slight increase in production, strong growth in sales and employment and a sharp rise in new orders.”

Five of seven activity indices were in expansion, with boosts in sales, employment and new orders all returning to growth due to the demand on the products mentioned above.

The largest manufacturing sector of the six tracked, food and beverages, led the way and was stable at 59.0. Petroleum, coal, chemicals and rubber products was 50.1. All the other sectors were well below 50.

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A full analysis can be read at this link.

(Source: https://cdn.aigroup.com.au/Economic_Indicators/PMI/2020/PMI_Mar_2020_22047n.pd)