The Australian Industry (Ai) Group’s Australian Performance of Manufacturing Index (Australian PMI) increased by 1.0 point in July to 56.0 points.
While the index for the largest manufacturing sub-sector, food, beverages and tobacco, dropped by 0.4 points to 55.9 points in July, it was still comfortably within the expansion range. According to Ai Group, within this sub-sector, strong expansions in production, sales and exports were evident in July. Also, food and beverages processors in the Australian PMI noted the higher Australian dollar has been curbing their rate of growth recently.
More broadly, manufacturers across many sectors are seeing significant challenges from soaring energy costs, higher raw material costs (the flipside of higher commodity pricing), the stronger Australian dollar, the departure of automotive assembly, strong international competition, and ongoing weakness in the retail sector.
“The broadly-based expansion of manufacturing continued in July with the sector contributing positively to the rebalancing of the broader economy,” said Ai Group CEO Innes Willox.
“Production, sales, exports and employment all grew during the month, in part thanks to the strength of other key sectors including construction and agriculture, and the recovery of spending in the mining sector.
“These growth opportunities more than offset the further decline of automotive assembly. They are also, at least for the time being, helping to mitigate the growing threats from unrelenting energy price rises and a higher dollar.”