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Australian PMIĀ®: Manufacturing jumps ahead in November

The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) jumped 6.2 points to 57.3 in November, marking a 14th consecutive month of expanding or stable conditions and the longest run of expansion since 2005 (readings above 50 indicate expansion in activity, with the distance from 50 indicating the strength of the increase).

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Ai Group Chief Executive, Innes Willox, said: "The manufacturing sector lifted strongly in November, building on an uninterrupted growth phase that began in October 2016. Sales, production and employment all jumped ahead in November and the strong rise in new orders points to further good news as we head to Christmas. The resumption of growth in exports is particularly encouraging after a slight easing in momentum in recent months. The period of steady employment growth for the sector was reflected in a lift in the pace of wage growth to its highest rate in over five years. The sharp rise in input costs recorded in November is a sobering reminder of the risks posed for the manufacturing sector by climbing energy costs," Mr Willox said.  

Australian PMI®: Key Findings for November:  

  • All seven activity sub-indexes in the Australian PMI® improved in November and all indicated expansion in the month (see table below). New orders (up 5.3 points to 60.4 points) and exports (up 8.9 points to 57.6 points) were especially strong, which bodes well for growth in 2018.
  • Five of the eight manufacturing sub-sectors expanded in November (trend data*), led by the very large food & beverages sub-sector (up 0.8 points to 59.7 points, its highest monthly result since April 2016). Non-metallic mineral products (mainly building materials) plunged 10.2 points and into contraction at 41.7 points in November, after expanding strongly through much of 2017.
  • Input prices (up 10.2 points to 76.4 points) and wages (up 5.1 points to 64.1 points) both rose sharply in November, with manufacturers across several sub-sectors noting that soaring energy costs are damaging their profitability.
  • The selling prices sub-index ticked up by 4.0 points to 52.2 in November, signaling that some manufacturers are passing these cost increases on to their customers. This follows strong downward pressure on prices in the previous two months.

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®

57.3

+6.2

55.9

Exports

57.6

+8.9

54.7

Production

56.6

+8.2

57.0

Sales

56.2

+5.2

55.5

New Orders

60.4

+5.3

59.0

Input Prices

76.4

+10.2

66.7

Employment

54.9

+1.7

53.5

Selling Prices

52.6

+4.0

51.8

Inventories (stocks)

54.4

+11.8

51.3

Average Wages

64.1

+5.1

59.8

Supplier Deliveries

57.3

+7.1

54.1

Cap. Utilisation (%)

74.9

+0.2

76.1

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