Australia — manufacturing PMI for October: 51.1 (prior 54.2)

Australian Industry Group Performance of Manufacturing Index drops 33.1 points on the month

  • 51.1 in October from 54.2 in September

Key points as noted by the Australian Industry GroupPMI fell … indicating slower growth after a run of stronger monthly expansions over the previous six months

  • September marked a thirteenth month of expanding or stable conditions for the Australian PMI and the longest run of expansion since 2007. Growth has slowed since mid-2017 however, with October indicating the slowest monthly growth since January 2017

Of the seven activity sub-indexes

  • three expanded, three contracted and one was stable in October
  • New orders and sales expanded (results over 50 points), but at slower rates than in September
  • Employment expanded more strongly
  • while supplier deliveries were stable for a second month
  • Exports, production and stocks (inventories) all contracted in October (results under 50 points)

Six of the eight sub-sectors expanded in October (trend) and two contracted

  • The non-metallic minerals sub-sector remained at a record high (72.2 points) due to strong demand for building-related products
  • The food and beverages sub-sector also performed well in October, while other sub-sectors expanded at slower rates

October marked the end of automotive assembly in Australia, with the closure of the last car assembly lines at GMH in Adelaide and Toyota in Melbourne. This was reflected in lower results (and an absolute contraction) in the Australian PMI in South Australia
Outside the automotive sub-sector, conditions appeared to be relatively buoyant, if a touch slower, in October. Positive sources of local demand for manufacturers included apartment and infrastructure construction; defence, mining and agricultural equipment; renewables and utilities. Higher input costs for electricity, gas, milk and butter are biting into margins.

This is the second of two manufacturing PMI from Australia each month. Ain’t we spoiled for choice? Yesterday we got the CBA / Markit version: Australia — CBA / Markit Manufacturing PMI (October) 55.5 (prior 53.8)
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