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Australian PMIĀ®: Manufacturing remains buoyant in March

The Australian manufacturing sector expanded strongly again in March, with the Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) down 1.8 points to register a solid 57.5 (readings above 50 indicate expansion in activity, with the distance from 50 indicating the strength of the increase). This was the sixth consecutive month of expansion for the Australian PMI®.

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Ai Group Chief Executive, Innes Willox, said: “The recovery in Australian manufacturing continued to build in March with another month of expansion in sales, production, employment and exports. The Australian PMI® result of 57.5 points was the sixth successive month of expansion and reflected robust growth in the key sub-sectors of food & beverages; machinery & equipment; metals products and non-metallic minerals. With new orders also growing strongly, the immediate outlook is for further and very welcome expansions in the manufacturing sector. The momentum in the sector is unambiguously good news for manufacturers, their employees and for the broader economy. Nevertheless, there is still a very considerable way to go before the fragilities of the past decade are behind us and we have a manufacturing sector that is contributing its full potential in a more balanced Australian economy. Before this can occur, the current uncertainties surrounding energy affordability, security and sustainability need to be urgently addressed,” Mr Willox said.  

Australian PMI®: Key Findings for March:

  • All seven activity sub-indexes in the Australian PMI® expanded in March (see table below), with expansion in new orders (up 2.0 points to 62.6) and sales (up 2.4 points to 57.7) strengthening.
  • Five of the eight manufacturing sub-sectors expanded in March (trend*), with the strongest growth in non-metallic mineral products (up 0.6 points to 64.8) and food and beverages (up 1.6 points to 63.4). Encouragingly, machinery & equipment continued to strengthen (up 0.9 points to 60.5) despite the ongoing exit of automotive assembly.
  • The input prices sub-index increased by 4.3 points in March to 65.5, with respondents pointing to higher steel and bulk commodity prices and soaring energy costs. The selling prices sub-index was largely unchanged (down 0.2 points to 53.5), with manufacturers’ improved ability to recover cost increases still being outpaced by growth in input costs and wages (down 4.8 points to 54.0).

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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®

57.5

-1.8

53.1

Exports

51.1

-5.9

54.5

Production

57.6

-7.7

53.7

Sales

57.7

+2.4

54.3

New Orders

62.6

+2.0

55.7

Input Prices

65.5

+4.3

62.7

Employment

54.1

-3.4

49.9

Selling Prices

53.5

-0.2

50.9

Inventories (stocks)

55.5

+7.2

50.9

Average Wages

54.0

-4.8

58.2

Supplier Deliveries

52.9

-3.4

52.9

Cap. Utilisation (%)

79.1

+2.2

74.6

* All sub-sector indexes in the Australian PMI® are reported in trend terms (Henderson 13-month filter), so as to better identify the trends in these volatile monthly data.

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