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Food and beverage leads the way in January’s improved PMI result

The first month of the year has seen a boost for Australia’s manufacturing sector, helped by the dollar’s depreciation, but it remains in contraction overall.

The Australian Industry Group PMI recorded an overall improvement of 2.1 points on December’s result to be at 49.0 in January.

Any result over 50 indicates growth, and below it contraction.

Three of seven sub-indices were above 50: exports were up 3.0 points to 54.0, supplier deliveries up 4.3 to 57.9, and stock levels 6.0 to 41.4.

By sub-sector, three of eight categories were in growth, with Food, Beverage & Tobacco leading the way (up 2.5 points to 62.9. Textiles, Clothing and Furniture, and Non-Metallic Mineral Products were both also in expansion.

The Ai Group’s chief executive Innes Willox said there were signs that the dollar, which fell as low as US 77.22 cents last week, would provide a “major fillip” to the industry.

However, it was a mixed blessing overall, and the environment remained challenging.

“This adverse impact of the lower dollar, together with the loss of sales from the sharp drop in mining investment, the wind down of auto assembly in Australia and generally weak business investment indicate that the headwinds facing the sector will continue well into 2015,” he said.

Image: https://www.ppshutters.com.au

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