Two months of manufacturing growth end as Melbourne lockdown bites

Two straight months of growth for manufacturing came to an end in August, according to the Australian Industry Group’s Performance of Manufacturing Index, with the Melbourne lockdown contributing to the negative result.

The overall PMI was 49.3, compared to 53.5 the month before and 51.5 in June. A result of 50 indicates no change, under 50 indicates contraction, and above 50, growth.

By state, Victoria — which contributes a quarter of the country’s GDP — was down 9.3 points in August to 44.0. The Ai Group noted a “significant divergence between the larger manufacturing states” in the month. NSW recorded a result of 51.0 (down 5.2), SA 65.3 (up 3.3) and Queensland 47.1 (up 9.7.)

Three of six sub-sectors were in growth, led by food and beverage at 57.8 (up 0.6).

All but one activity index (exports at 52.2, up 10.8) weakened during the month.

“Employment was broadly stable and the export index showed a marked improvement pointing to a recovery in at least some markets overseas,” said Ai Group chief executive Innes Willox.

“The further fall in new orders cast a major shadow over conditions in coming months and further stimulus is likely to be needed to help accelerate the recovery of consumer and business spending.”

The full results can be accessed here.

Subscribe to our free @AuManufacturing newsletter here.