Manufacturing growth ends with ‘further slowing increasingly likely’: Ai Group

After expanding for almost all of 2022, manufacturing fell into slight contraction in August, according to Australian Industry Group’s Performance of Manufacturing Index.

The monthly survey has shown results indicating growth every month since January, which was impacted by an outbreak of the Omicron Covid-19 variant over the summer. August’s 49.3 represented a fall of 3.2 points.

Any result under 50 indicates contraction.

The August PMI shows four of six manufacturing sectors decreasing in output over the month. The biggest drop was in metal products, which was down 8.7 points to 42.4.

Every activity index besides new orders (which dropped over August) was in contraction.

The results released on Thursday pointed to the end of recent expansion, said Innes Willox, Chief Executive of the Ai Group.

“Production, employment and sales were all down in August and most manufacturing sectors reported lower performance in the month” said Willox. 

“Prices and wages continued to push higher and with the Reserve Bank seeking to ease these pressures by raising interest rates, further slowing in manufacturing looks increasingly likely over the coming months.”

A full report is available here.

Picture: www.aigroup.com.au

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