Manufacturing grew over June, despite cost pressures

The Australian Industry Group’s Performance of Manufacturing Index saw manufacturing expand slightly over June, despite input prices at their highest in two decades.

The PMI was up 1.6 points versus May’s result to 54.0, characterised by the Ai Group as “mild growth”.

Any result above 50 indicates expansion, and below it contraction. Exactly 50 represents no change.

Four of six sectors tracked by the survey were in expansion, led by the small TCF, paper & printing sector, which bounced back to be “strongly expansionary”.

The largest sector, food & beverage sector, slumped further into contraction, “and the metal products sectors contracted sharply from expansion the previous month” according to the Ai Group.

Input costs  were beginning to hurt margins, respondents said, and were up again over the month, recording “the highest reading since 2002.”

“Although input price pressures continued to accumulate, Australia’s manufacturing sector expanded again in June with solid increases in production and new orders and a slight lift in employment,” said Innes Willox, Chief Executive of the Ai Group.

“While export sales were up, domestic sales fell reflecting the decline in consumer and business confidence in the face of concerns about inflation, interest rates and asset values.

According to the PMI, manufacturing has been in growth since February, following an Omicron variant-affected January/February slump.

Picture: www.aigroup.com.au

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