Australia’s manufacturing sector experienced its fifth
straight month of contraction in April, according to today’s Australian
Industry Group PMI.
The index was up slightly (1.8 points) from March’s overall result of 46.3, though remained under 50 (the line separating expansion
from contraction).
There were bright spots in housing construction, low
interest rates and the lower dollar. However, the local market was reluctant to
invest in new equipment, said Innes Willox, the Ai Group’s CEO.
“While another cut in interest rates may help boost
demand, budgetary measures, particularly those targeting increased investment
are more likely to provide the lift the domestic economy needs,” Willox said in a
statement.
Other difficulties included the weak mining sector and
the wind-down of the automotive industry.
Every single activity sub-index within the PMI was
under 50, even exports (down 4.3 points to 47.5), which had previously been in
expansion for four months.
By sub-sector, the results looked more encouraging.
Food and beverage led the way with a result of 55.3 (down 4.1 points), with
three other sub-sectors in growth.
For detailed results from the survey at the Ai Group’s website, click here.
Image: Nic Kocher/Fairfax