The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) fell by 6.4 points to 48.4 over the summer holiday period (December 2021 and January 2022*), indicating weaker conditions compared with November 2021 (readings below 50 points indicate contraction in activity, with lower results indicating a faster rate of contraction).

Innes Willox, Chief Executive of Ai Group the national employer association said: "Australia's manufacturers reported a modest contraction in performance over December and January as businesses reported further disruptions to supply chains and as staff availability emerged as a major constraint on many businesses. Cost pressures were keenly felt with input prices continuing to rise and the selling prices index indicating only a partial recovery of these costs in the market.

"The fall in performance in the December-January period reversed the improvements in manufacturing conditions reported last November as activity restrictions were eased in the south east corner of the country. In contrast, the December and January period was heavily influenced by the much higher level of COVID-19 infections and the jump in the number of people in isolation.

"The performance of the food & beverages sector fell sharply with much smaller contractions reported by metal products and chemicals manufacturers. In contrast, building product producers reported a strong lift in performance and machinery & equipment manufacturers reported further gains as did businesses in the diverse textiles & paper group. Manufacturing employment and exports slipped into negative territory after short-lived recoveries in November. Production was broadly flat and sales edged higher. The new orders index fell steeply pointing to a reduction of confidence among businesses dealing with new implications of the COVID-19 pandemic," Mr Willox said.

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Australian PMI®: Key Findings for December 2021 and January 2022

  • Six of the seven activity indices in the Australian PMI® fell in December and January (see table below), with only the sales index increasing (up 1.7 points to 52.3). Production (down 0.6 points to 51.9), new orders (down 8.0 points to 51.3), and stocks (down 6.1 points to 52.5) remained mildly positive following stronger results in November.
  • Three of the six manufacturing sectors in the Australian PMI® reported positive conditions in December and January, with the strongest results from manufacturers in the building materials (up 6.5 points to 63.4) and machinery & equipment (down 2.3 points to 53.5) sectors. The very large food & beverage sector fell into contraction (down 19.2 points to 38.2) after a temporary rebound in November.
  • The input prices index rose steeply over the holiday period (up 4.0 points to 82.3), indicating faster price increases on average, while selling prices eased from a recent series high of 68.1 but remained elevated (down 3.3 points to 64.8).
  • The average wages index lifted (up 1.1 points to 63.5) and remained above its long-run average (58.9 points) as staff availability was reduced with increasing numbers of people isolating due to the impact of the COVID-19 Omicron variant.

View all Economic Indicators

Seasonally adjusted Index Dec & Jan Change from Nov '21 Long-run average
Australian PMI® 48.4 -6.4 50.8
Production 51.9 -0.6 51.5
Employment 45.4 -4.6 49.2
New Orders 51.3 -8.0 51.6
Supplier Deliveries 37.8 -15.6 50.9
Finished Stocks 52.5 -6.1 49.9
Exports 45.1 -9.5 50.1
Sales 52.3 1.7 49.6
Input prices 82.3 4.0 67.9
Selling prices 64.8 -3.3 49.1
Average wages 63.5 1.1 58.9
Capacity utilisation (%) 76.2 -2.3 74.3
Seasonally adjusted Index this month Change from last month Long-run average
Food & Beverages 38.2 -19.2 53.7
Machinery & Equipment 53.5 -2.3 50.3
Metals products 48.8 -7.6 47.5
Petroleum, coal, chemicals & rubber products 48.0 -2.6 51.7
Building, wood, furniture & other 63.4 6.5 50.1
Textiles, clothing, footwear, paper & printing 52.1 0.8 47.0

Results above 50 points indicate expansion. 

* The monthly data for the Australian PMI® in December 2021 and January 2022 are combined into one data release that describes two months of survey participation (released on 1 February 2022). 

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 2022 Australian PMI® release dates.

Media Enquiries: Tony Melville: 0419 190 347