The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) eased by 0.8 points to 50.4 in October – a fourth consecutive month of deceleration and the weakest monthly result for the index since September 2020 (readings above 50 points indicate expansion in activity, with higher results indicating a faster rate of expansion).
Four of the activity indexes in the Australian PMI® contracted in October, with declines in production, employment, exports and supplier deliveries. More positively, forward orders continued to expand at a relatively strong pace, indicating that recovery is likely after COVID-19 restrictions lift more fully and across more locations.
Ai Group Chief Executive Innes Willox said: "Although restrictions began to be eased, vaccination rates rose and the country edged towards a living with COVID approach, the year-long run of improving manufacturing performance was put on hold in October. Ongoing restrictions, supply chain dislocation and difficulties in filling positions combined to hold back further expansion in the sector. These factors are also driving up input prices, some of which are flowing through to customers where market conditions permit. The largest manufacturing sector – food & beverages – recorded a sharp contraction in the face of low demand and unavailability of freight. The metal products sector edged into negative territory in the face of continuing activity restrictions, supply chain disruption and shortages of labour. Other manufacturing sectors managed to lift performance even though many businesses reported similar barriers to growth. Although October was nothing to write home about, manufacturers will be encouraged by the sharp lift in new orders received and by the further progress towards removing COVID restrictions," Mr Willox said.
Australian PMI®: Key Findings for October 2021
| Seasonally adjusted | Index this month | Change from last month | Long-run average |
|---|---|---|---|
| Australian PMI® | 50.4 | -0.8 | 50.8 |
| Production | 47.8 | -5.3 | 51.5 |
| Employment | 48.0 | 0.9 | 49.2 |
| New Orders | 58.3 | 6.3 | 51.5 |
| Supplier Deliveries | 41.2 | -8.0 | 50.9 |
| Finished Stocks | 51.6 | -4.4 | 49.8 |
| Exports | 46.1 | -5.8 | 50.1 |
| Sales | 50.2 | 1.7 | 49.5 |
| Input prices | 81.8 | 3.7 | 67.8 |
| Selling prices | 63.9 | -0.8 | 48.9 |
| Average wages | 63.7 | 10.8 | 58.8 |
| Capacity utilisation (%) | 76.7 | -0.3 | 74.3 |
| Seasonally adjusted | Index this month | Change from last month | Long-run average |
| Food & Beverages | 37.4 | -13.0 | 53.9 |
| Machinery & Equipment | 55.4 | 7.0 | 50.3 |
| Metals products | 48.7 | -5.5 | 47.5 |
| Petroleum, coal, chemicals & rubber products | 57.0 | 2.8 | 51.7 |
| Building, wood, furniture & other | 55.6 | 4.3 | 50.0 |
| Textiles, clothing, footwear, paper & printing | 52.5 | 5.6 | 47.0 |
Results above 50 points indicate expansion.
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
