Manufacturing picked up pace in April with the latest Australian PMI rising 9.3 points to 59.8
May 5, 2010
Manufacturing picked up pace in April with the latest seasonally adjusted Australian Industry Group – PricewaterhouseCoopers Australian Performance of Manufacturing Index (Australian PMI) rising 9.3 points to 59.8.
Healthier market conditions in the building and infrastructure sectors fuelled the growth with eleven sectors in positive territory in April.
Clothing & footwear declined for the fourth consecutive month, while employment rose significantly, with the sub-index up 7.3 points for an April reading of 55.2.
Ai Group Chief Executive Heather Ridout says while the manufacturing
sector remains behind pre-downturn levels, the encouraging results
indicate the recovery is gaining some traction.
“Although manufacturers are still battling severe headwinds in the form of the high dollar, the withdrawal of the fiscal stimulus and the return to ‘normal’ interest rates, the April Australian PMI shows a sector gaining lost ground as activity across the economy broadens. Reflecting continuing competitive pressures and the strength of the Australian dollar, exports are growing more modestly,” Ridout says.
“In the near-term, the sector remains vulnerable to higher costs of financing and any reduction in demand that would flow from higher interest rates,” she says.
However, signs a recovery is gathering pace are no reason for complacency, according to Ridout.
“The sector faces fundamental challenges from emerging skills shortages and the commodity-fuelled (relative interest rate differential expectations are more important at the moment) currency,” she says.
“The coming Federal Budget presents an opportunity to address these challenges with active policy in the area of education and skills development, a resumption of pre-crisis levels of skilled immigration and far-sighted investments in innovation, research and development, business capabilities and export market development.”