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Australian PMI®: Manufacturing gains momentum in November

The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) increased by 3.3 points to 54.2 in November, indicating a more convincing expansion across the manufacturing sector after relatively stable conditions in recent months (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 continued to rebound after the weakness seen a few months ago. Both the lift in the pace of expansion and its broader base are encouraging with production, sales, exports, employment and new orders all moving forward in November. A particularly positive sign is that recovery in the important machinery and equipment sub-sector extended into its third month. If this translated into a more substantial pick-up in business investment over the next few months, it would go a long way to making up for some areas of weakness including in the metal products sub-sector, which continues to be buffeted by global oversupply,” Mr Willox said.  

Australian PMI®: Key Findings for November:

  • Six of the seven sub-indexes in the Australian PMI® expanded in November (see table below), headed by a strong lift in new orders (up 4.8 points to 59.5) and solid growth in sales (down 1.5 points to 53.5). Exports (down 0.1 point to 55.9) continued to provide a source of growth for manufacturers.
  • Three of the eight manufacturing sub-sectors expanded in November (that is, above 50 points in three-month moving averages): food and beverages (up 6.1 points to 56.5); petroleum & chemical products (up 1.7 points to 57.1); and machinery & equipment (up 0.8 points to 54.9). Printing & recorded media (down 6.0 points) and non-metallic mineral products (up 5.5 points) were both stable at 50.8 points.
  • Input prices eased but remained elevated (down 3.8 points to 62.5), while the selling prices sub-index moved back into expansion in November (up 3.6 points to 51.5); comments from manufacturers point to continued difficulties in passing on full input cost increases.

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Seasonally adjusted

Index this month

Change from last month

12 month average

 

Index this month

Change from last month

12 month average

Australian PMI®

54.2

+3.3

52.4

Exports

55.9

-0.1

53.6

Production

53.5

+3.8

53.2

Sales

53.5

-1.5

53.4

New Orders

59.5

+4.8

54.4

Input Prices

62.5

-3.8

62.3

Employment

52.3

+4.6

49.2

Selling Prices

51.5

+3.6

50.1

Inventories (stocks)

46.2

+0.3

51.0

Average Wages

53.8

-5.2

57.7

Supplier Deliveries

52.7

+0.0

52.4

Cap. Utilisation (%)

76.6

+1.9

74.1

Release dates for Australian Performance Indices in 2017

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