Australia’s manufacturing sector is continuing to languish in the doldrums, according to the latest Australian Performance of Manufacturing Index (PMI) released by the Australian Industry Group (Ai Group).

The PMI recorded a 44.4 posting for March, down 1.2 points on February, where any result below 50 indicates a contraction, and the distance from 50 indicative of the severity of the decrease.

Ai Group Chief, Innes Willox, said that the results show that ‘industry would certainly welcome a further reduction in official interest rates’.

The March Australian PMI® result is disappointing after the tentative signs of a pick-up in February. The strong dollar, falling selling prices, further cost pressures and the weakness of commercial and residential construction continue to take their toll,” Mr Willox said.

The latest figures include:  

  • The latest seasonally adjusted Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) fell 1.2 points to 44.4 in March (readings below 50 indicate a contraction in activity with the distance from 50 indicative of the strength of the decrease).
  • March saw the reversal of the significant lift in the new orders and production sub-indices in February. The new orders sub-index fell to 39.4 and the production sub-index dropped to 41.7 in March.
  • Wood & paper products recorded the only expansion in March (50.1).
  • The non-metallic & mineral products; printing & recorded media; metal products; food, beverage & tobacco products; and textiles clothing & other manufacturers sub-sectors all recorded deteriorating conditions in March.
  • The decline in manufacturing employment continued to ease in March with the sub-index rising by 1.2 points to 48.7.
  • Input prices rose again in March with the sub-index recording a reading of 65.5.

Download the full March Australian PMI®