The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) dropped by 1.5 points to 52.5 in July, indicating a weaker rate of expansion compared to the previous month (readings above 50 points indicate expansion in activity, with higher results indicating a faster rate of expansion).
Innes Willox, Chief Executive of Ai Group the national employer association said: “The supply and labour constraints afflicting the Australian economy are weighing heavily on the manufacturing sector. Production and employment both fell in July, as manufacturers struggle with chronic labour shortages and supply chain interruptions. New orders rose this month, but our manufacturers simply can’t meet this demand without more workers. Manufacturing has a key role to play in reducing the inflationary pressures facing Australia. To unlock the industry’s full potential we need to promptly address skilled labour shortages,” Mr Willox said.
Australian PMI®: Key Findings for July 2022
- Manufacturing activity slowed in July. Most subsectors eased but the metal products sectors recovered strongly.
- Labour challenges, supply chain disruptions and high energy prices remain the major structural constraints on manufacturing.
- Input prices declined for the first time since February 2022 but remain at very high levels. Employment declined, reflecting labour shortage pressures on manufacturing businesses.
- Most manufacturing activity indicators declined in July. However, new orders and sales strengthened, despite tight supply chain pressures.
| Seasonally adjusted | Index this month | Change from last month | Long-run average |
|---|---|---|---|
| Australian PMI® | 52.5 | -1.5 | 50.9 |
| Production | 47.5 | -7.2 | 51.6 |
| Employment | 50.1 | -0.9 | 49.2 |
| New Orders | 59.9 | 4.2 | 51.8 |
| Supplier Deliveries | 47.4 | -4.1 | 50.8 |
| Finished Stocks | 55.1 | -1.6 | 50.0 |
| Exports | 51.2 | -1.8 | 50.0 |
| Sales | 54.0 | 9.0 | 49.7 |
| Input prices | 79.7 | -9.6 | 68.4 |
| Selling prices | 64.5 | -3.3 | 50.0 |
| Average wages | 62.8 | -6.5 | 59.2 |
| Capacity utilisation (%) | 81.9 | 0.0 | 74.5 |
| Seasonally adjusted | Index this month | Change from last month | Long-run average |
| Food & Beverages | na | na | na |
| Machinery & Equipment | 48.8 | -8.6 | 50.5 |
| Metals products | 51.1 | 10.4 | 47.7 |
| Petroleum, coal, chemicals & rubber products | 55.1 | -0.6 | 51.8 |
| Building, wood, furniture & other | 45.8 | -6.6 | 50.3 |
| Textiles, clothing, footwear, paper & printing | 59.4 | -7.8 | 48.8 |
Results above 50 points indicate expansion. All indexes for sectors in the Australia PMI® are reported in seasonally adjusted terms.
