The food and beverage subsector has continued to expand in October, while the manufacturing sector remains overall stable, according to the latest Australian Industry Group (AiG) Performance of Manufacturing Index (PMI).
The food, beverages and tobacco sub-sector’s index was one of two sub-indexes to expand in October, moving up by 1.8 points to 56.7 points (three-month moving averages). This sub-sector has expanded (above 50 points) in every month since March 2013, except for May 2014.
The sub-indexes continue to indicate solid conditions in this sub-sector, with sales, new orders, production, employment and supplier deliveries all expanding in October (i.e. above 50 points).
The food, beverages and tobacco sub-sector, the single largest manufacturing sub-sector, has had the strongest growth trend of all the manufacturing sub-sectors over the past one to two years.
Overall, the Australian Performance of Manufacturing Index increased by 2.9 points to 49.4 in October, indicating conditions were very close to stable across the manufacturing sector.
Australian Industry Group Chief Executive, Innes Willox, said "The slide in manufacturing activity we have seen for the past couple of months has eased, with the sector broadly stable in October. However, conditions remain patchy within the manufacturing sector with considerable differences between sub-sectors and with production and new orders lifting, whereas employment fell further during the month.
“Respondents to the Australian PMI indicated that despite the fall in the Australian dollar since early September, it remains relatively high and import competition remains intense. More generally, businesses remain cautious and hesitant about undertaking the investments needed to underwrite future productivity and employment growth,” Willox said.