Australian manufacturing is recovering according to the Australian Industry Group, whose Performance of Manufacturing Index (PMI) this morning rose 1.5 points to 53.2.
The October reading of 53.2 is nicely back above the 50 expansion/contraction line and has been aided by solid numbers for new orders (55.7), production (54.5) and deliveries which printed 54.4.
In another small sign that maybe Australian consumers are finally releasing the purse strings a little, the food, beverage and tobacco sector was the strongest with a reading of 65.6.
But as if to highlight the RBA Governor’s obvious disquiet earlier this week, when he said the Aussie dollar was out of line with the usual fundamental drivers and could fall “materially”, manufacturing exports are terrible with an index reading of 34.1.
Innes Willox, CEO of the Australian Industry Group, noted: “Production expanded for the first time in two and half years and new orders continued to recover.”
This is really good news and although the Aussie dollar is an obvious handbrake, the internals to this release suggest Australian economic activity is starting to pick up.
Just like yesterday’s building approvals data suggested, monetary policy looks like it might be working.
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