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Manufacturing remains under pressure


A measure of manufacturing activity showed a ninth straight month of contraction in November as firms complained of soft demand, higher energy costs and a strong dollar.

The Australian Industry Group's performance of manufacturing index (PMI) dipped 1.6 points in November to 43.6, reversing a 1.1 point gain the month before.

That left the index well below the 50 level that is supposed to mark the threshold between contraction and expansion. The softness was broad based with only one of 11 sectors covered showing growth.

In an ill omen for the labour market the survey of 200 firms found a sharp pullback in hiring intentions with the index of employment dropping 5.0 points to 41.7.

Sizable falls were recorded in sectors from chemicals, petroleum & coal products to basic metals, fabricated metals, transport equipment and miscellaneous manufactures.

The index of production fell 0.4 points to 44.8, while that for new orders declined by 0.4 points to 43.5.

The survey suggested profit margins remained under pressure, with wages and input costs rising while selling prices declined.


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