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