Australia’s Performance of Manufacturing Index (PMI) slipped further into contraction territory in November following three months of flat conditions.
The Australian Industry Group’s (Ai Group) PMI rating for November fell by 4.9 points to 44.7, indicating deteriorating conditions. Ratings below 50 points indicate contraction, with lower results showing a faster rate of contraction.
Five out of six indices in the Australian PMI all fell into contraction in November, while Building, wood and furniture products showed an uptick into mild growth on strength of new orders.
Textiles, clothing, footwear, paper & printing declined precipitously to be in serious contraction, while food & beverages and machinery & equipment fell into contraction for the first time.
Market activity in the metal products and chemicals sector has seen improvement in October but now remains in contraction.
The Ai Group’s report also found that the input price index eased slightly in November to 77.2, but remains well above its long-run average.
Manufacturers’ selling prices remain in expansion, but at a slower rate than October and slower than input prices.
According to the survey, demand-side conditions have deteriorated in the face of national and economic headwinds, with many businesses having seen a downturn in new orders and sales.
Meanwhile, supply-side pressures on manufacturing, including tight labour markets and supply chain interruptions, appear to have peaked.
The pressures are yet to materially decline and remain well elevated on its long-run trend, the Ai Group said in its report.
