The Performance of Manufacturing Index (PMI) result for June has just been released by PriceWaterhouseCoopers and Australian Industry Group, with a 48.9 being recorded. This is the eighth consecutive monthly contraction.
Rising Dollar Still a Concern
Remaining firmly above the US$0.90 mark (US$0.94), the Australian dollar’s strength has dampened the sharp rise witnessed to the PMI in May, albeit remaining below the breakeven result of 50.
Individual Sub-Sector Performance
The food and beverage sub-sector remains the shining star of the entire manufacturing sector, recording an expansionary 52.5 after an unexpected contraction in April.
Wood and paper products also expanded, following on from a similar positive result for the previous month.
All other sub-sectors recorded a contraction for June, including those that had expanded in May (Petroleum, coal, chemicals and rubber products, Non-metallic minerals, and Textile, clothing and other goods).
Once again there is a continued gulf between input costs and selling prices, which remains unsustainably high.
Possible Future Expansion?
Much has been made of the impending cessation of the carbon tax, with it’s removal expected to increase the competitiveness of local manufacturers. This is especially the case where local manufacturers are competing directly with importers. However, any result is still many months down the track.
To download a two-page précis of the report, click here…PMI June 2014
