The manufacturing sector is enjoying its longest run of expansion in five years, as the weaker Australian dollar makes locally made goods more competitive with imports.
The Australian Industry Group’s Performance of Manufacturing Index (PMI) rose 2.3 points to 52.5 in November, indicating activity in the sector is increasing at a faster pace. Manufacturing activity has now risen for a fifth consecutive month.
Ai Group chief executive Innes Willox says the sector is enjoying better business conditions because the Australian dollar has stayed quite low.
He added that considerable cost savings and other efficiencies that manufacturers have introduced over recent years has also helped, as has strong demand from the booming housing construction sector.
“Improvements in sales, exports, production, new orders and employment underwrote another stronger manufacturing performance in November,” he said.
“However, areas of weakness remain, most notably in the important metals and machinery & equipment sub-sectors, which continue to feel pressures from tough global market conditions and the weakening in Australia of mining investment and automotive assembly.”
Five of the eight manufacturing sub sectors expanded in November, up from four in October, with food and beverages being the one that moved into positive territory.