The Australian Industry Group Australian Performance of Manufacturing Index (PMI) managed to climb 2.9 points to a relatively stable 49.8 for the month of September after August’s sharp decline.

According to Ai Group, a PMI reading above 50 points indicates that manufacturing is generally expanding and below 50, that it is declining. The distance from 50 is indicative of the strength of the expansion or decline. 

Printing and Recorded Media was one of only three manufacturing sub-sectors which managed to remain solid despite August’s manufacturing lull.

The print sector only dropped a meagre 0.8 points to 62.8, metal products declined 4.6 points to 51.3 and petroleum & chemical products fell 2.1 points to 52.7.

The manufacturing sector’s steady performance in September is being attributed to strong activity in Australia’s food and beverage industry.

Ai Group chief executive Innes Willox says, “The manufacturing sector avoided a deeper fall in September after the sharp drop recorded in August. The food and beverages sub-sector was the major swing factor with a bounce back after an inventory-related slump in the previous month.

“The broadly stable result saw growth in sales and production offset by a further drop in employment and a contraction in new orders.

He continues, “Mixed results across the manufacturing sub-sectors underline the fragility of activity within manufacturing and indeed across the broader economy.”

Willox says there is need for policy action in Australia’s manufacturing sector and urges federal politicians to consider the benefits from a reduction in company tax rate outlined in the Government’s Enterprise Tax Plan.

Comment below to have your say on this story.

If you have a news story or tip-off, get in touch at editorial@sprinter.com.au.  

Sign up to the Sprinter newsletter