In order to bring you the best possible user experience, this site uses Javascript. If you are seeing this message, it is likely that the Javascript option in your browser is disabled. For optimal viewing of this site, please ensure that Javascript is enabled for your browser.
Contact Us 1300 55 66 77 Workplace Advice Line, Membership & General Enquiries
Media Centre  

Australian PMI®: Manufacturing stabilises in July

Monday 03 August 2015

Return to Previous Page

Activity across the Australian manufacturing sector stabilised in July, after contracting in June, with the Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) recovering 6.2 points to 50.4 (readings above 50 indicate expansion in activity, the distance from 50 indicating the strength of the increase).

Four of the seven activity sub-indexes expanded in July. Manufacturing sales (up 12.9 points to 53.9) expanded for the first time in 14 months, while production (up 10.6 points to 54.2) and supplier deliveries (up 6.3 points to 50.6) reversed sharp declines in June to return to expansion. New orders (up 7.6 points to 49.8) also recovered lost ground to approach stability, but stock levels (down 1.7 points to 47.9) and manufacturing employment (up 2.6 points to 47.5) remained in negative territory. The exports sub-index expanded for a third consecutive month (up 1.6 points to 51.8), reflecting the lower Australian dollar.

Three of the eight manufacturing sub-sectors expanded in July, led by food, beverages & tobacco (down 1.7 points to 58.9) for a 14th month. The relatively small wood & paper products sub-sector (up 4.4 points to 68.2) expanded for a fifth month, while petroleum, coal, chemical & rubber products (up 2.2 points to 50.7) returned to expansion after a brief contraction in June.

Ai Group Chief Executive, Innes Willox, said: "The lower dollar was an important positive factor in the July turnaround in manufacturing performance which saw another lift in exports. Healthy contributions from the food and beverages sector and industry segments linked to residential construction offset continued weakness in other areas including the important machinery and equipment sector. Machinery and equipment is suffering from the drop in demand from mining-related construction and the ongoing wind-down of automotive assembly."   

Australian PMI®: Key Findings for July:

  1. The Australian PMI® stabilised in July, climbing 6.2 points to 50.4 after dropping 8.1 points in June.
  2. Three of the eight manufacturing sub-sectors expanded in June: food, beverages & tobacco (down 1.7 points to 58.9); wood & paper products (up 4.4 points to 68.2); and petroleum, coal, chemical & rubber products (up 2.2 points to 50.7). Printing & recorded media was stable at 50.0 points after four months of expansion.  
  3. Textiles, clothing & furniture (down 3.2 points to 49.3) returned to contraction after a brief expansion in June. The machinery and equipment (down 0.6 points to 40.5), metal products (up 3.3 points to 43.0), and non-metallic mineral products (down 2.5 points to 44.0) sub-sectors continued to contract.
  4. After only the manufacturing exports sub-index managed to stay marginally above 50 points in June, four of the seven activity sub-indexes expanded in July: Manufacturing sales (up 12.9 points to 53.9) expanded for the first time in 14 months, while production (up 10.6 points to 54.2) and supplier deliveries (up 6.3 points to 50.6) reversed June’s sharp declines to return to expansion. New orders (up 7.6 points to 49.8) stabilised, while the exports sub-index remained in positive territory (up 1.6 points to 51.8).
  5. Despite the recovery in sales and supplier deliveries, manufacturing stock levels (down 1.7 points to 47.9) reduced for a sixth consecutive month, while manufacturing employment (up 2.6 points to 47.5) also remained in contraction.
  6. The input prices sub-index was unchanged in July (up 0.2 points to 63.1), while the wages sub-index rose by 7.4 points to 64.5, reflecting the 2.5% increase in the national minimum wage and award wage rates from July 1. Manufacturing selling prices rose 4.9 points to 52.3 after three months of contraction, making only a small inroad into the intense downward pricing pressures of weak local demand.

 
Download the full July 2015 Australian PMI® report.

 

Media enquiries: Tony Melville - 0419 190 347

Background: The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) is a seasonally adjusted national composite index based on the diffusion indices for production, new orders, deliveries, inventories and employment with varying weights.  An Australian PMI® reading above 50 points indicates that manufacturing is generally expanding; below 50, that it is declining.  The distance from 50 is indicative of the strength of the expansion or decline.  Australian PMI® results are based on responses from around 200 companies from a rotating sample of manufacturers. The manufacturing sub-sector categories in the PMI match the ANZSIC industry classifications for manufacturing and are weighted, based on 2011-12 industry output data from the ABS.