MNI 5 Things:Australia AI Mfg Continues Strong Expansion Spree

--AI Manufacturing Index Expands for 21 Straight Months

By Sophia Rodrigues

     SYDNEY (MNI)  - Following are the five main observations we made from

Australian Industry Group's Performance of Manufacturing Index for June

published Monday:

     --The index was little-changed versus May, down 0.1 point to 57.4, thus

continuing its strong run of expansion for 21 months in a row. 

     --Indicators linked to inflation suggest slightly modest upward pressure

but show continued pressure on margins that could restrain wage increases.

Capacity utilization rebounded in June, up 3.0 percentage points to 79.1, wages

rose 0.4 point to 58.8, input prices rose 0.3 points to 70.3 and selling prices

rose 0.7 points to 55.8.

     --New orders dropped 4.8 points to 57.6 but remained at an elevated level,

indicating growth prospects remain strong. The decline in June was attributed to

financial year end pressures.

     --Seven of the eight sub-sectors expanded in June, the same as May.

Sub-sectors that provide manufactured goods for civil engineering, residential,

and commercial construction projects continue to report very strong levels of

activity while drought conditions are having an adverse impact on manufacturers

linked to the agricultural sector, particularly those operating in the food and

beverages, metals and machinery and equipment sub-sectors.

     --Despite the depreciation in the Australian dollar in recent weeks, the

exports sub-index was little-changed, up just 0.4 points to 52.9. Exports are

mainly supported by food and beverages sub-sector which rose 0.8 point to 59.2.

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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