(Australian Associated Press)
Sales and exports of manufactured products dropped last month, a survey of Australian companies suggests, but the industry hired more workers and their wages increased.
“While sales and production were down in September, the lifts in employment and new orders are encouraging pointers for coming months,” Ai Group chief executive Innes Willox said after the release of Australian Performance of Manufacturing Index on Tuesday.
The overall PMI was up 1.6 points to 54.7 in September, above the 50-point mark that separates expansion and contraction in activity, after a 1.8 per cent rise in July.
“The employment index jumped 6.2 points to 57.6 points, indicating an acceleration in hiring in September from manufacturing firms,” the PMI report said.
The increase in new orders – which hit their highest level in a year – and jobs during the month was propped up by a strong performance from the food and beverages sector as well as machinery and equipment makers.
“There appears to have been progress made on large infrastructure projects after months of delays, with some manufacturers reporting more projects going ahead and increased tendering opportunities,” the report added.
The PMI’s average salaries sub-index rose to its highest point since October 2018, pointing to more companies “facing wage increases across manufacturing”.
But many businesses reported feeling squeezed, with the PMI report indicating the number of sales and selling prices both fell back into contraction in September.
New orders increased overall but shrank for the building and furniture sector, which also recorded “especially low” sales numbers.
“The downturn in residential construction is starting to negatively impact the building materials sector as the number of residential construction completions start to decline,” the report said.
The survey indicated overall exports of manufactured goods fell sharply, dipping into contraction, after a robust reading in the previous month.