The Australian Industry Group’s monthly Performance of Manufacturing Index (PMI) survey showed an improved result for February, with food and beverage and wood and paper growing strongly.
The PMI, a seasonally adjusted national composite index, recorded an overall slowed contraction, with a score of 45.6 (January’s result was 40.2). Any result under 50 indicates that the industry shrunk overall.
This was still the 12th straight month of contraction in the PMI, though solid results were recorded in the food, beverage and tobacco (57.9) and wood and paper (57.6) sectors.
The AIG noted that some of the severe pressures on manufacturing were easing, but conditions were still challenging.
Innes Willox, the group’s CEO, said that “despite low official interest rates, conditions in manufacturing remain very testing with households not yet ready to loosen the purse strings and businesses still delaying investment in machinery and equipment.”
"With opportunities for revenue growth so constrained and with rises in wages and input costs – particularly for energy – businesses continue to cut costs and look across their business for efficiencies," Willox said in a statement, reported by AAP and others.