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October 01, 2017 22:49 GMT
REPEAT: Australia AI Mfg Index Down But Stays in Expansion
Repeats Story Initially Transmitted at 22:49 GMT Oct 1/18:49 EST Oct 1
--Manufacturing Expands for 12 Straight Months
SYDNEY (MNI) - - From Australia Industry Group's Performance of
Manufacturing Index for September published Monday:
September Change from August
-------------------------------------------------------
Australian PMI 54.2 -5.6
Production 56.9 -4.5
New Orders 55.9 -8.4
Employment 52.4 -4.0
Inventories 51.7 -7.2
Supplier Deliveries 50.5 -2.4
Exports 51.2 +1.9
Sales 51.4 +0.5
Average Wages 61.2 +2.2
Input Prices 65.8 +2.9
Selling Prices 49.3 -4.4
Capacity Utilization (%) 77.6 +0.6
FACTORS: The AI manufacturing index expanded for the 12th straight month in
September, but the pace slowed due to drops in five of the seven sub-indexes.
Still, all the seven sub-indexes were again in expansion in September, with new
orders leading at an elevated 55.9 points and production at 56.9. Among
sub-sectors, non-metallic mineral products rose 1.5 points to a record 75.5,
reflecting demand for building materials for local apartments and infrastructure
projects. Respondents also reported unexpected export orders to the U.S. as a
result of emergency relief and reconstruction operations in the wake of recent
hurricane damage. The largest sub-sector -- food, beverages and tobacco -- rose
marginally to 56.1 points as new orders and exports expanded, and production and
sales picked up. The large metal products index fell to 51.3 points -- the
lowest level this year -- but the sub-sector continues to benefit from stronger
demand from construction and engineering activity, as well as mining, utilities
and agricultural projects. Among price indicators, wage rose, which is a
positive. but input prices also rose while selling price fell, indicating
pressure on manufacturers' margins.
TAKEAWAY: The manufacturing industry continues to expand despite an
elevated exchange rate, which is a positive development. The survey vindicates
the optimism shown by Reserve Bank of Australia in forecasting continued growth
for the economy despite the elevated Australian dollar, though it remains
concerned that a further rise could hurt growth and employment prospects.
COMMENTS: AI Group Chief Executive Innes Willox said this year's recovery
in manufacturing activity is continuing, but the latest survey shows that
conditions are moderating and growth is decelerating.
"Of great concern to all manufacturers continues to be the impact of energy
and gas prices on their bottom line. Mounting energy costs are further squeezing
already-fragile profitability," he said.
--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com
[TOPICS: MTABLE]
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