Ai Group reports manufacturing deteriorated in November

The Australian Industry Group’s Performance of Manufacturing Index showed deteriorating conditions in its final report for 2022.

The Australian PMI fell 4.9 points to 44.7 in November, indicating deteriorating conditions (readings below 50 points indicate contraction in activity, with lower results indicating a faster rate of contraction). This is the first month of contraction following three months of flat conditions.

“There are now signs of a slowdown in Australian manufacturing,” said Innes Willox, Chief Executive of Ai Group. “Demand conditions in the market declined in November as deteriorating national and global economic conditions weighed on the industry.

“Longstanding supply-side problems, such as tight labour markets and supply chain disruptions, appear to have peaked but remain elevated. Energy prices continue to rise. Manufacturing is at risk of being squeezed between deteriorating demand conditions and persistent supply side pressures.”

Key findings for November 2022 are:

• Five of the six sectors in the Australian PMI are now in contraction, as are six of the seven activity indicators.
• Demand-side conditions have deteriorated in the face of national and global economic uncertainty. Production, new orders and sales were all significantly down in November.
• Supply-side pressures on manufacturing — tight labour markets and supply chain interruptions — appear to have peaked. But these pressures are yet to materially decline and remain well elevated on long-run trend.
   

The full report can be found here.

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