The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) dropped 3.2 points to 49.3 in August, indicating a slight contraction (readings below 50 points indicate contraction in activity, with lower results indicating a faster rate of contraction). This is the first time the index has contracted since January 2022 following the Omicron outbreak.
Innes Willox, Chief Executive of Ai Group the national employer association said: "The Ai Group Australian PMI® for August points to the end of the recent expansion of manufacturing activity. Production, employment and sales were all down in August and most manufacturing sectors reported lower performance in the month. The chemicals subsector expanded as did the diverse textiles, clothing, footwear, paper & printing subsector. Prices and wages continued to push higher and with the Reserve Bank seeking to ease these pressures by raising interest rates, further slowing in manufacturing looks increasingly likely over the coming months," Mr Willox said.
Australian PMI®: Key Findings for August 2022
| Seasonally adjusted | Index this month | Change from last month | Long-run average |
|---|---|---|---|
| Australian PMI® | 49.3 | -3.2 | 50.9 |
| Production | 45.7 | -1.8 | 51.6 |
| Employment | 47.5 | -2.6 | 49.2 |
| New Orders | 55.8 | -4.1 | 51.8 |
| Supplier Deliveries | 47.1 | -0.3 | 50.8 |
| Finished Stocks | 45.9 | -9.2 | 50.0 |
| Exports | 46.9 | -4.3 | 50.0 |
| Sales | 45.2 | -8.8 | 49.7 |
| Input prices | 81.7 | 2.0 | 68.4 |
| Selling prices | 69.1 | 4.6 | 50.1 |
| Average wages | 74.1 | 11.3 | 59.3 |
| Capacity utilisation (%) | 78.5 | -3.4 | 74.6 |
| Seasonally adjusted | Index this month | Change from last month | Long-run average |
| Food & Beverages | 45.1 | -4.9 | 53.6 |
| Machinery & Equipment | 44.9 | -3.9 | 50.5 |
| Metals products | 42.4 | -8.7 | 47.7 |
| Petroleum, coal, chemicals & rubber products | 62.1 | 7.1 | 51.8 |
| Building, wood, furniture & other | 43.3 | -2.4 | 50.3 |
| Textiles, clothing, footwear, paper & printing | 58.5 | -0.9 | 48.8 |
Results above 50 points indicate expansion. All indexes for sectors in the Australia PMI® are reported in seasonally adjusted terms.
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.
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