The Ai Group Australian Industry Index® eased in October 2023, dropping 6.5 points to -9.9 points (seasonally adjusted). The index, which reports industry conditions and sentiment, has indicated contraction for the last 18 months.
Key findings for October 2023:
- The Ai Group Australian Industry Index® shows a broader range of industrial businesses reported contractionary conditions in October.
- The employment, activity and new orders indicators all fell.
- The Australian PCI® construction indicator continued a rally, rising strongly into expansion to post its highest score since March 2021.
- Machinery & equipment continued a recovery trend, while business services and upstream manufacturers still report slow conditions.
- Price indicators all remained strongly positive, but the sales price indicator eased. The wages indicator was stable but high, and continues to point to strong wages pressure.
Innes Willox, Chief Executive of the national employer association Ai Group said: “The employment index fell back into contraction in October, while activity and new orders declined more steeply than in the previous month. Further improvement in the Australian PCI® indicator is a positive sign, with a broader range of construction firms reporting improved trading conditions. But the Aii indicates a worsening of contractionary conditions in the industrial sector as a whole. This is particularly evident in upstream manufacturing sectors and business services,” Mr Willox said.
Australian Industry INDEX® Activity indicators | Index Oct 2023 | Change from last month | Australian Industry index® Sectors & subsectors | Index Oct 2023 | Change from last month |
Australian Industry Index® | -9.9 | -6.5 | Australian PMI® (all manufacturing) | -20.9 | -8.1 |
Activity/Sales | -16.9 | -9.9 | Chemicals | -11.7 | 1.6 |
Employment | -7.3 | -8.8 | Minerals & Metals | -37.1 | 5.8 |
New Orders | -17.3 | -8.0 | Machinery & Equipment | 14.0 | 15.9 |
Input Volumes | 12.4 | 5.1 | Food, Beverages & TCF | -4.5 | -6.5 |
Exports | -25.6 | -15.6 | Australian PCI® (construction) | 18.5 | 11.4 |
Input Prices | 46.0 | 0.4 | Business Services | -23.6 | -17.0 |
Sales Prices | 16.5 | -8.9 | |||
Average Wages | 35.9 | 0.7 | Capacity Utilisation (%) | 80.2 | -0.5 |
Positive scores indicate expansion; negative scores contraction | |||||
The Ai Group Australian Industry Index® is a monthly index of business activity in the Australian industrial ecosystem. It includes the manufacturing, construction, engineering, technology and business services sectors, which together account for approximately 36% of the Australian economy. It reports on a -100 to 100 scale. Values below 0 indicate contraction, and above 0 indicate expansion. The distance from 0 indicates the strength: 20 is expanding faster than 10.
