MNI 5 Things: Australia AI Mfg Points to More Labor Shortages

By Sophia Rodrigues

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

Industry Group's Performance of Manufacturing Index published Thursday:

     --The index fell 1.2 points to 57.5 in February but continued its longest

run of expansion since 2005. February marked a seventeenth month of expanding or

stable conditions and since July 2015, the index has contracted just two times

-- August and September 2016.

     --The wages sub-index fell 2.3 points to 56.8 and to the lowest level since

July 2017. However, comments from manufacturers suggest stronger prospects for

wages growth. More manufacturers are reporting labor and skill shortages, and

some report increased reliance on overtime and many are looking to employ more

staff but find it difficult to find skilled workers for their locations or

specializations.

     --Selling prices recovered slightly to move into expansion but continued to

indicate ongoing cost pressures from manufacturing inputs and especially energy

inputs.

     --Six of the eight sub-sectors expanded in February in trend terms. The

largest food and beverages sub-sector was firmly in expansion at 57.7 points and

saw strong exports but selling prices remained subdued due to weakening

wholesale prices. The machinery and equipment sub-sector saw strong new orders

particularly for transport and specialist industrial machinery, and increase in

export orders to the U.S. and Asia. 

     --Capacity utilization rose to match the record high seen in December 2017

(79.7%) and suggests investment and employment might need to expand in some

parts of manufacturing, in order to meet future demand.

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

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