Manufacturing Outlook Improves

2 Nov 11

The Australian Industry Group/PriceWaterhouseCoopers PMI climbed 5.1 points in October to 47.4, but remains below the 50 mark that seperates expansion and contraction.

In analysing the PMI data it is encouraging to see improvement in October particularly with a noteable pick up in employment prospects although manufacturers continue to struggle against the headwins of the high dollar and foreign competition.

The survey of over 200 companies confirmed renewed softness in the clothing and footwear and paper, printing and publishing sub-sectors. Fortunately the basic metals, transport equipment and miscellaneous manufacturers sub-sectors recorded the strongest expansion, in part because of stronger demand from the mining sector.

The survey's measure of output rose 6.7 points to 45.9 in October, while the index of new orders strengthened by 2.3 points to 46.9.

Yesterday also saw the Reserve Bank cut interest rates by 0.25 percent to 4.5 percent with the Government calling on the Banks to not only relieve the pressure on residential mortgages, but business interest rates as well.