The Ai Group’s Australian Performance of Manufacturing Index (Australian PMI) rose by 4.8 points to 53.2 in February – indicating mild improvements and a progression towards positive territory after a decline in December 2021-January 2022.
Four of the seven activity indices in the Australian PMI expanded in February, with finished stocks indexes enlarging at an accelerating rate following the supply chain disruptions of the December-January period.
While the input prices index fell, four of the six manufacturing sectors in the Australian PMI broadened – chemicals, metals products, printed products, textiles, clothing & footwear – responding to healthy demand from construction, agriculture and business.
New orders were very secure – pointing to further strength over the months ahead.
“Australia’s manufacturing sector edged back into expansion during February following the sharp labour and supply chain disruptions of the December-January period,” Ai Group’s national employer association’s chief executive Innes Willox said.
“Price and wage pressures continued in February with some easing in the pace of increase in input prices. At the same time, selling prices accelerated, suggesting further recovery of earlier cost increases.”
According to Willox, the performance of the machinery & equipment sector was the strongest on the back of healthy demand from construction, agriculture, and logistics businesses.
“In contrast, the food & beverage sector declined again – although at a noticeably slower pace while the building products sector slipped into contraction. Employment eased across the sector while production lifted and sales growth edged ahead,” Willox said.
Key findings for February 2022
Four of the six manufacturing sectors in the Australian PMI expanded in February, with chemicals (up 5.4 points to 53.5) and machinery & equipment products (up 3.5 points to 57.0) reporting relatively strong expansion. The food & beverage sector improved but remained in contraction (up 9.3 points to 47.4).
Four of the seven activity indices in the Australian PMI expanded in February, with the production (up 2.7 points to 54.6), new orders (up 8.5 points to 59.8) and finished stocks (up 3.4 points to 55.9) indexes expanding at an accelerating rate.
The input prices index fell in February (down 6.7 points to 75.6), indicating that input price increases decelerated compared to the preceding holiday period. Selling prices increased (up 6.8 points to 71.6), reversing the temporary drop reported in December 2021-January 2022.
The average wages index increased slightly (up 1.4 points to 64.9) and remained in strong expansion in February and above its long-run average (58.9 points).