Pandemic leads to “historic low” in manufacturing survey running since 1966

A quarterly survey tracking manufacturing sentiment since 1966 has found sentiment in the industry at its lowest point since records began.

The 235th Australian Chamber–Westpac Survey of Industrial Trends has worsened for each of the last three quarters. Its “actual composite index” recorded a result of 24 in the June quarter, down from 45 in March and 53 in the December quarter. 

Australian Chamber of Commerce and Industry CEO James Pearson said the results were “sobering.”

“The survey confirms that the COVID-19 global pandemic and measures to combat the virus have had a dramatic impact on the manufacturing sector,” he added,

“The historic low underlines the need to help get businesses back on their feet and people back into jobs as soon as it is safe to do so, by easing COVID-19 restrictions and reversing falling demand.”

A net 22 per cent of respondents expected the situation to worsen in the next six months, compared to a net 9 per cent in March.

“Employment, new orders, output, order backlog and overtime all posted a sizeable contraction,” said Westpac senior economist Andrew Hanlan.

Exports were down a net six per cent in the result, compared to a net 1 per cent increase in March, said Pearson, and this was a reminder of their importance through the pandemic.

“With 86 per cent of respondents reporting no change in their level of exports, it’s great news to hear this market remained relatively strong. We need to play to our strengths and make it even easier for Australian firms to trade with the world,” he said.

“Australian made products are typically focused on premium markets and demand for our quality is holding up.”

The full results can be read here.

The result follows a negative result in the most recent Australian Industry Group Performance of Manufacturing Index, released on the first of June, and described as “deeply concerning.”

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