Home > Sector still shrinking, budget hurts confidence: Ai Group PMI

Sector still shrinking, budget hurts confidence: Ai Group PMI

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Australia’s manufacturing sector remains in contraction, according to the Australian Industry Group’s PMI, released this morning.

The Ai Group’s PMI for May recorded a result of 49.2, slightly below 50, the point which separates expansion from contraction.

The overall result was an improvement on April's by 4.4 points.

Four of eight subsectors experienced growth, led by Wood and Paper Products (55.8). Food and Beverage contracted for the first time since February last year.

There was a “dampening in confidence following the Federal Budget” noted among the respondents.

"The manufacturing sector continues to be buffeted by weak household demand, a lack of business confidence and fierce competition in both domestic and export markets, heightened by the renewed strength in the Australian dollar," said AiG chief executive Innes Willox in a statement.

“The public reaction to the Federal Budget appears to be weighing negatively on consumer sentiment and business confidence.”

The Production and New Orders sub-indices both expanded and registered results of 51.6 and 55.1 respectively.

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