The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI) rose 0.9 points to 50.2 in September, indicating a second month of broadly stable conditions following positive results since February.

Specific to the printing and packaging sectors, the index for the textiles, clothing, footwear, paper and printing products segment dropped by 18.6 points to 39.9 points, indicating a contraction in September compared to the previous month, seasonally adjusted.

Ai Group has found that higher interest rates and staff shortages were challenges in this sector.

“Some businesses were able to pass on higher input costs to customers. Government work increased but jobs from private businesses fell,” the report found.

Ai Group CEO Innes Willox said, “Manufacturing activity held steady in September, demonstrating its resilience in the face of more uncertain economic conditions. However, the manufacturing employment index declined and is now in significant contraction.

“Manufacturers report that absenteeism, high labour costs and labour shortages are hampering their ability to maintain employment levels. Absenteeism will be helped somewhat by the welcome National Cabinet decision to scrap mandatory COVID isolation rules. However, ongoing labour shortages continue to point to the great national urgency to address skills gaps across the Australian economy.”

The latest Australian Performance of Manufacturing Index can be found here.

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