It seems the manufacturing sugar hit that was in evidence straight after the September election has run its course with news this morning from the Australian Industry Group (AiG) that its Manufacturing PMI slumped 5.4 points to 47.7 in November.
50 points marks the demarcation between expansion and contraction.
The survey showed that there was a contraction in the “sub-indexes for production, new orders and supplier deliveries”. But there was a little kernel of hope insofar as the employment sub-index rose 1.5 points to sneak into the expansion zone at 50.1, which was the highest reading since October 2011.
But there wasn’t a lot of good news from the AiG Chief Executive, Innes Willox who said: “Survey respondents indicated that the mild lift in local new orders immediately after the September federal election is already drying up, as mining, government, maintenance and R&D spending slows. While the current downward pressures on the dollar are positive for the industry, the currency remains stubbornly high. The dollar and fierce import competition continue to take their toll, as many businesses struggle to maintain market share in an environment of generally weak demand for local goods and equipment. Export markets also remain tough under the influence of the relatively high dollar with the exports sub-index dropping under 30 points again this month.”
It’s a disappointing result for those who were hopeful that manufacturing might have turned a corner.