Ai Group’s Australian Manufacturing Index (PMI) increased by 3.2 points to 55.3 over the summer holiday period, with manufacturing businesses reporting stronger recovery over the normally quiet holiday season. But textiles, clothing, footwear, paper and printing businesses reported further declines, Ai said.
"In December and January, Australian manufacturing continued to make up ground lost during much of 2020,” said Ai Group CEO Innes Willox. “Production, employment and exports all expanded although domestic sales were down on November levels.
“The food & beverages, machinery & equipment and chemicals sectors were particularly strong and more than made up for a flat metal products sector, a further decline in building products and weakness among textiles, clothing, footwear, paper & printing businesses. While the sector has not returned to pre-COVID conditions, the turnaround from September is more decisive than was expected and is an encouraging sign of the resilience of Australian manufacturing and the effectiveness of fiscal and monetary policy measures in response to COVID. However, it is clearly still far too early to proclaim a full recovery of the sector.”
Textiles, clothing, footwear (TCF), paper & printing products
Australian PMI: Key Findings for December 2020 and January 2021
Six of the seven activity indices in the Australian PMI expanded in December 2020 and January 2021, with only the sales index contracting (down 4.2 points to 46.5). The exports index jumped into strong expansion (up 11.4 points to 61.4), driven by exports of food & beverages.
“Three of the six manufacturing sectors in the Australian PMI expanded in December and January, with the food & beverages (up 16.4 points to 59.5), machinery & equipment (up 6.5 points to 66.5) and chemicals (up 8.4 points to 66.3) sectors all increasing at an accelerating pace over the two months,” said Ai. “The metal products sector was stable (down 6.0 points to 50.6) while textiles, clothing, footwear, paper & printing plunged into contraction (down 24.4 points to 47.2)."
The input price index eased slightly over the holiday period, indicating marginally slower price increases on average, while selling prices remained stable. The average wages index eased below its long-run average after rising sharply in November in response to increases to manufacturing award pay rates.
Download the full report here.
The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) is a national composite index calculated from a weighted mix of the diffusion indices for production, new orders, deliveries, inventories and employment.
