Manufacturing slowdown in Australia is showing signs of stabilising for the third month in a row, according to the seasonally-adjusted Australian Industry Group — PricewaterhouseCoopers Australian Performance of Manufacturing Index (PMI).
The PMI for manufacturing activity in July rose 6.1 points to 44.5, which while below the 5.-point market which separates expansion from contraction is still a positive sign for Australian industry.
Ai Group chief executive, Heather Ridout, said: “The easing in the rate of decline in manufacturing activity is encouraging. This is supported by the direction of the Global PMI, which stood at 46.9 in June 2009. In Europe, Japan and the US, declines in new orders and production have eased to levels last seen around the middle of last year.
“It is clear that the manufacturing performance in Australia has been deeply influenced by fiscal and monetary stimulus and inventory rundowns. Looking beyond the monthly figures, the big question is whether these improvements will be sustained once these stimulatory forces have abated.”
PricewaterhouseCoopers global leader of industrial manufacturing, Graeme Billings, said: “While the early signs of nascent recovery that have been emerging from recent Australian PMI results is encouraging, market conditions facing manufacturers will continue to squeeze profitability for some time.”