Ai Group Chief Executive Innes Willox said: "The broad-based expansion in Australia's manufacturing sector continued in February led by the food & beverage and the petroleum, chemicals & rubber product sub-sectors. Production, employment and exports were all encouragingly strong and the further growth in new orders points to the likelihood that the sector will extend its 17-month unbroken run into autumn. The high level of employment growth in the sector continues to be reinforced by moderate wage outcomes on average. That said, for some producers, skill-shortages are re-emerging as a constraint on growth and are putting pressure on remuneration among a range of highly-skilled occupations. This and high energy costs are keeping a lid on producers' margins," Willox said.
Australian PMI®: Key Findings for February:
- February marked a 17th month of expanding or stable conditions for the Australian PMI® – the longest run of expansion since 2005.
- For the fourth consecutive month all seven activity sub-indexes in the Australian PMI® expanded. Five sub-indexes slowed, however, with only employment (up 5.7 points to 57.8) and exports (up 4.7 points to 56.5) accelerating.
- Six of the eight manufacturing sub-sectors expanded in February (trend data*), with the larger sub-sectors such as metal products (up 1.7 points to 58.3) continuing to see a sustained period of expansion and/or recovery.
- Weaker conditions remain evident in textiles & clothing (an historic low of 33.0 points adding to more than two years of continuous contraction) and printing & recorded media (down 5.3 points to 39.7).
- The input prices sub-index remains elevated but continued to ease back from November’s six-year high (down 1.2 points to 68.5). The wages sub-index fell to its lowest point since July 2017 (down 2.3 points to 56.8), having sat at around 60 points for the majority of 2017.
- The selling prices sub-index increased by 1.4 points to 50.6, indicating broadly stable prices for customers, despite ongoing cost pressures from manufacturing inputs (energy costs in particular).
Background: 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. An Australian PMI® reading above 50 points indicates that manufacturing activity is expanding; below 50, that it is declining. The distance from 50 indicates the strength of expansion or decline. Australian PMI® results are based on responses from a national sample of manufacturers that includes all states and all sub-sectors. The Australian PMI® uses the ANZSIC industry classifications for manufacturing sub-sectors and sub-sector weights derived from ABS industry output data. Seasonally adjusted and trend data are calculated according to ABS methodology. The Australian PMI® commenced in 1992. More information about the history and methodology of the Australian PMI® is available online.
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