Manufacturing has recorded growth not seen since May 2002, with the sector bolstered by demand in the construction, mining and infrastructure sectors.
The Australian Industry Group-PricewaterhouseCoopers performance of manufacturing index (PMI) rose 9.3 index points to it’s highest since May 2002 of 59.8 points in April.
Australian Industry Group chief executive Heather Ridout said the manufacturing sector was strong, despite the high value of the Australian dollar making exports relatively more expensive.
“Although manufacturers are still battling severe headwinds in the form of the high (Australian) dollar, the withdrawal of the fiscal stimulus and the return to normal interest rates, the April Australian PMI shows a sector gaining lost ground as activity across the economy broadens,” Mrs Ridout said in a statement.
“While the manufacturing sector still remains behind the levels of mid-2008, the encouraging results are signs the recovery, which has been patchy to date, is now beginning to gain some traction,” Mrs Ridout said.
“Reflecting continuing competitive pressures and the strength of the Australian dollar, exports are growing more modestly.”
“In the near-term, the sector remains vulnerable to higher costs of financing and any reduction in demand that would flow from higher interest rates.”
PricewaterhouseCoopers global head of industrial manufacturing Graeme Billings welcomed the upshift in activity.
“However, profitability will remain under pressure, given the ongoing significant lift in input cost growth which we have seen over recent months,” Mr Billings said.
“Manufacturers will need to sustain a strong focus on cost management over coming quarters particularly in the face of rising skills shortages.”
