Manufacturing in growth still in September – AiGroup

The Australian Industry Group Australian Performance of Manufacturing Index has continued its generally positive run, rising 0.9 points to 50.2 points in September 2022.

Readings above 50 points indicate expansion in activity, with higher results indicating a faster rate of expansion.

While activity contracted in all sectors but chemicals and machinery & equipment, new orders and sales grew in September, and the pace of growth improved from August.

Other findings were:

• The employment index has fallen rapidly, which reflects labour shortage pressures
• The wages index remains very high
• Labour challenges remain an ongoing constraint and supply chain disruption continues to be a key concern for manufacturing similar to previous months.

Ai Group Chief Executive Innes Willox said: “Manufacturing activity held steady in September, demonstrating its resilience in the face of more uncertain economic conditions.

“However, the manufacturing employment index declined and is now in significant contraction.”

Manufacturers report that absenteeism, high labour costs and labour shortages are hampering their ability to maintain employment levels.

Absenteeism will be helped somewhat by the welcome National Cabinet decision to scrap mandatory Covid isolation rules.

“However, ongoing labour shortages continue to point to the great national urgency to address skills gaps across the Australian economy.”

Picture: GPC Electronics