Contractionary conditions ease for industry: report
The Australian Industry Group (Ai Group), has announced that the contractionary conditions in the organisation’s Australian Industry Index eased in September 2023, gaining 8.2 points to -3.5 points (seasonally adjusted). The index, which reports industry conditions and sentiment, has indicated contraction for the last 17 months.
This is a marked improvement over the index report in April, which reported a drop of 14 points.
The Australian Industry Index indicated contracting conditions in September, for the 17th month since the start of the current interest rate cycle; however, the employment, industrial activity and new orders indicators all improved significantly, the fourth month of a recovery trend following lows seen in April and May.
Price indicators remained strongly positive according to the report, but input prices and wages have continued to ease from peaks in July. The sales price indicator recovered after a large fall in August.
Sub-industries reported mixed conditions. The construction indicator strongly returned positive, business services and downstream manufacturing began recovery, but upstream manufacturing remains fragile.
“Welcome relief for industry has been reported in September, with the Australian Industry Index showing improvements in activity, employment and new orders,” said Innes Willox, Chief Executive of Ai Group. “While the index has been growing since a low point in May, it remains in negative territory, with new orders still relatively weak and holding back the pace of the recovery which appears underway. A strong rebound in the Australian PCI construction indicator is welcome news for the housing sector, but weakness in upstream chemicals and metals manufacturing remains a concern.”
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