Manufacturing continues positive run in February


The Australian Performance of Manufacturing Index rose 2.8 points to 53.8 in February

Manufacturing continues positive run in February
Manufacturing continues positive run in February

March 1, 2010

A lift in new orders has seen the manufacturing sector record another positive result in February, with the Australian Industry Group - Pricewaterhouse Coopers Australian Performance of Manufacturing Index (PMI) rising 2.8 points to 53.8.

According to AiGroup, selling prices rose for the first time in five months while input costs also increased.

Companies linked to the housing and resources sector grew solidly for a second consecutive month.

AiGroup Chief Executive Heather Ridout says last month’s Australian PMI represents an encouraging outcome for the manufacturing sector, and admits conditions do appear to be improving.

"The combination of rising new orders and production augers well for the industry in coming months. However, employment remained lacklustre reflecting the still patchy nature of growth with continuing weak results in some five out of twelve manufacturing sectors," Ridout says.

She says sectors exposed to the construction and resources sectors are showing signs of stronger activity while consumer related sectors have weakened.

"The impact of the strong Australian dollar and higher interest rates are posing formidable headwinds to growth while high interest rates are also dampening demand."

Key results released today show stronger production and input deliveries, driven by a lift in new orders, fuelled February's result.

Although the new orders sub-index remained stable at 56 in February, nine out of the 12 sectors recorded a lift in new orders, up from six in January.

The employment index lifted slightly (2.6 points) but employment prospects remain relatively lacklustre.

Growth was reportedly strongest in the paper, printing & publishing and textiles while sectors linked to the housing and resources sectors, including construction materials; transport equipment and chemicals, petroleum & coal products, grew solidly over the month.

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