Australia Manufacturing Sector Slips Back Into Contraction

The manufacturing sector in Australia dropped back into contraction in August, the latest survey from the Australian Industry Group showed on Tuesday with a Performance of Manufacturing Index score of 49.3.

That’s down from 53.5 in July and it moves back beneath the boom-or-bust line of 50 that separates expansion from contraction.

Manufacturers related to food & beverages (including printing and packaging for groceries), medical & pharmaceutical products, and some parts of freight transport, reported a robust recovery in conditions while other sectors reported lower demand due to the COVID-19 recession.

There was significant divergence between the larger manufacturing states in August. Victoria’s PMI fell by 9.3 points and back into contraction at 44.0 points. In contrast, the PMI in NSW and South Australia continued to indicate recovery in August, while the PMI in Queensland improved but continued to indicate a period of contraction.

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