The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) eased by 2.4 points to 60.8 in July, remaining in strong expansionary territory but indicating a slower rate of growth from June's record expansion (readings above 50 points indicate expansion in activity, with higher results indicating a faster rate of expansion).
Ai Group Chief Executive Innes Willox said: "While COVID-19 outbreaks and associated restrictions in some states undoubtedly dampened the upswing in activity and shook confidence, the manufacturing sector recorded another strong month of expansion in July. Production, employment, and sales of manufactured goods all grew at a faster pace than in June. Performance improved at record rates in the machinery & equipment, chemicals, and metal products sectors. Less positively, input prices escalated at a record rate and the pace of wages growth picked up on both trend and seasonally adjusted measures. These cost pressures were reflected in higher selling prices.
"The slower pace of the manufacturing upswing in July and the slower pace of growth in new orders suggest further easing in the months ahead. A significant headwind for the sector is that Sydney's toughest restrictions relate to local government areas where there is a concentration of manufacturing sites and the manufacturing workforce. We expect the dampening impacts of these restrictions will flow along supply chains across the country with some offset from the easing of Victorian restrictions," Mr Willox said.
Australian PMI®: Key Findings for July 2021
| Seasonally adjusted | Index this month | Change from last month | Long-run average |
|---|---|---|---|
| Australian PMI® | 60.8 | -2.4 | 50.8 |
| Production | 61.8 | 1.1 | 51.6 |
| Employment | 60.8 | 0.5 | 49.2 |
| New Orders | 62.5 | -8.1 | 51.5 |
| Supplier Deliveries | 59.6 | 1.3 | 51.0 |
| Finished Stocks | 55.1 | -5.2 | 49.8 |
| Exports | 53.6 | -6.6 | 50.1 |
| Sales | 61.7 | 2.7 | 49.5 |
| Input prices | 84.6 | 5.8 | 67.7 |
| Selling prices | 64.7 | 1.1 | 48.6 |
| Average wages | 69.1 | 7.5 | 58.8 |
| Capacity utilisation (%) | 79.0 | -3.3 | 74.2 |
| Trend | Index this month | Change from last month | Long-run average |
| Food & Beverages | 61.9 | 0.0 | 53.9 |
| Machinery & Equipment | 65.0 | 0.2 | 50.3 |
| Metals products | 62.3 | 2.2 | 47.5 |
| Petroleum, coal, chemicals & rubber products | 66.1 | 1.0 | 51.7 |
| Building, wood, furniture & other | 62.9 | -0.6 | 50.1 |
| Textiles, clothing, footwear, paper & printing | 59.3 | -0.3 | 46.9 |
Results above 50 points indicate expansion. * All indexes for sectors in the Australian PMI® are reported in trend terms (Henderson 13-month filter).
Background: The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) is a national composite index calculated from a weighted mix of the diffusion indices for production, new orders, deliveries, inventories and employment. An Australian PMI® reading above 50 points indicates that manufacturing activity is expanding; below 50, that it is declining. The distance from 50 indicates the strength of expansion or decline. Australian PMI® results are based on responses from a national sample of manufacturers that includes all states and all sub-sectors. The Australian PMI® uses the ANZSIC industry classifications for manufacturing sub-sectors and sub-sector weights derived from ABS industry output data. Seasonally adjusted and trend data are calculated according to ABS methodology. The Australian PMI® commenced in 1992. More information about the history and methodology of the Australian PMI® is available online.
Full list of 2021 Australian PMI® release dates.
Media Enquiries: Tony Melville: 0419 190 347
