Disturbing but perhaps not unsurprising news from the Australian Industry Group’s (AiG) Performance of Manufacturing Index which slipped back a further 0.9 points to 46.7.
That’s deeply in the contraction zone and all of the sub-indices remained in negative territory.
Innes Willox, CEO of the AiG, sounded a warning on growth, noting in the release accompanying the data that:
Our other large manufacturing sectors continue to struggle, despite the lower dollar and low interest rates. Muted local demand and a difficult export market means they are in no position to assume the lead in generating alternative sources of growth as the mining investment boom fades through 2014. We urgently need to invest in a more balanced and diversified growth path to smooth this transition and manufacturing will continue to play a key role in any such strategy
This data flies in the face of the NAB Business Survey last week, but is a warning to the RBA and policy makers in Australia that growth might still struggle.
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