static image

Australian PMI®: Manufacturing growth continues in July

The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) increased by 1.0 point to 56.0 in July – a tenth consecutive month of expansion for the manufacturing sector (readings above 50 indicate expansion in activity, with the distance from 50 indicating the strength of the increase).

Download full report

Ai Group Chief Executive, Innes Willox, said: "The broadly-based expansion of manufacturing continued in July with the sector contributing positively to the rebalancing of the broader economy. Production, sales, exports and employment all grew during the month, in part thanks to the strength of other key sectors including construction and agriculture, and the recovery of spending in the mining sector. These growth opportunities more than offset the further decline of automotive assembly. They are also, at least for the time being, helping to mitigate the growing threats from unrelenting energy price rises and a higher dollar," Mr Willox said.

Australian PMI®: Key Findings for July:

  • Six of the seven activity sub-indexes in the Australian PMI® expanded in July (see table below) with new orders (down 3.7 points to 55.8) and sales (down 5.1 points to 55.8) continuing to expand, albeit at a slower pace, while employment bounced back into positive territory (up 8.4 points to 57.4).
  • Six of the eight manufacturing sub-sectors expanded strongly in July (trend data*), led by non-metallic mineral products (up 1.9 points to 67.3), wood & paper products (up 1.7 points to 67.0) and machinery & equipment (down 0.7 points to 58.0). The textiles, clothing, furniture & other manufacturing sub-sector fell deeper into contraction (down 0.2 points to 34.7) while printing & recorded media ended its recent recovery, slumping 4.4 points to 47.9.
  • The input prices sub-index increased a further 4.4 points to 69.3 in July, while wages dropped 4.7 points to 55.7, dipping below its six-month average (58.1 points).
  • The selling prices sub-index increased by 2.9 points to a neutral 50.0 in July, with manufacturers seemingly limited in their ability to pass through continued increases in energy, input costs and wages.

View all Economic Indicators

Seasonally adjusted

Index this month

Change from last month

12 month average

 

Index this month

Change from last month

12 month average

Australian PMI®

56.0

+1.0

54.2

Exports

53.9

-0.7

54.7

Production

59.0

+1.7

54.9

Sales

55.8

-5.1

55.1

New Orders

55.8

-3.7

57.2

Input Prices

69.3

+4.4

64.8

Employment

57.4

+8.4

51.3

Selling Prices

50.0

+2.9

51.6

Inventories (stocks)

49.0

+4.7

49.4

Average Wages

55.7

-4.7

58.3

Supplier Deliveries

54.0

-3.4

53.8

Cap. Utilisation (%)

76.3

-0.9

75.5

Background: The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) is a seasonally adjusted national composite index based on the diffusion indices for production, new orders, deliveries, inventories and employment with varying weights.  An Australian PMI® reading above 50 points indicates that manufacturing is generally expanding; below 50, that it is declining.  The distance from 50 is indicative of the strength of the expansion or decline.  Australian PMI® results are based on responses from around 200 companies from a rotating sample of manufacturers. The manufacturing sub-sector categories in the PMI match the ANZSIC industry classifications for manufacturing and are weighted, based on 2011-12 industry output data from the ABS.

Media Enquiries: Tony Melville – 0419 190 347