Tha NAB runs the best and most informative business surveys in the nation and today comes an update on Australian manufacturing which, in contrast to expectations is actually doing okay.
From the note:
NAB’s Manufacturing Activity Index remained positive in Q3 2013, at +0.3 points. This level was largely unchanged from the previous quarter, and is considerably stronger than the levels that were evident in 2012. The index implies that the manufacturing sector recorded some modest quarterly growth, increasing by around +0.4%.
Here is a summary of every major category of manufacturing in Australia:
- Food & Beverage activity index strengthened a little further in Q3, up to +0.8 points.
- Chemicals activity index pulled back sharply in the September quarter, but remained the strongest overall at
+1.2 points (compared with +1.9 points in Q2).
- Printing and Publishing activity index was one of the strongest improvers in Q3, although it remained the
weakest sector overall at -0.5 points.
- Textiles, Clothing & Footwear activity index recorded a modest improvement in the September quarter –
pushing up to +0.8 points.
- Wood Product activity index pulled back in Q3, down to +0.2 points
- Machinery & Equipment activity index improved in the September quarter, rising to +0.3 points.
- Metal Product activity index contracted moderately in Q3, down to -0.5 points.
- Non-metallic minerals activity index recorded the largest increase this quarter – moving up to +0.8 points in
The key thing all sectors had in common was better confidence.
Now all we need it the expectation embedded in confidence to become real as business conditions improve in the months ahead. At least that will be the RBA’s plan.