Australian manufacturing has now grown for 23 consecutive months. Figures from the Australian Industry Group Australian Performance of Manufacturing Index show that although the manufacturing sector’s growth is slowing, it is still positive. This level of growth is the highest in Australia since 2005.
The headline figure of 56.7 for the Australian PMI is the strongest out of Australia, the US, the Eurozone, the UK, Japan and China.
Employment in the manufacturing sector has also arrested its decline and is growing steadily. Manufacturers are reporting less spare capacity, which also supports the increase in employment levels. As a result, upward pressure on manufacturing wages is going to be a feature of the manufacturing economy until the end of the year.
Not All Good News
The main cause for concern among manufacturers is the reported decline in margins. The continued drought has driven up input costs, whilst sell prices have remained stagnant. Manufacturing wages are also a factor.
The report can be viewed by clicking August 2018 PMI.