Australia - Australian Industry Group Manufacturing PMI (September) 54.2 (prior 59.8)

  • Australia - Australian Industry Group Manufacturing PMI (September) 54.2 (prior 59.8)

Australia - Australian Industry Group Manufacturing PMI (September) 54.2 (prior 59.8)

The seasonally adjusted IHS Markit/CIPS Purchasing Managers' Index (PMI) registered 55.9 in September, down from August's four-month high of 56.7, but above its long-term average of 51.7.

Production grew at an accelerated pace in September, underpinned by strong client demand. "Latest data indicated only a marginal rise in new orders from overseas, which was partly linked to weak demand from US clients".

"Overall growth continued to be driven by sharp expansions in both output and new orders, which in turn contributed to another solid rise in employment, boosting hopes of a further fall in the unemployment rate", he said. Currency weakness was reportedly the main reason leading to higher input costs (the rupiah being under pressure - like other emerging market currencies - amid renewed United States dollar strength).

'Manufacturing is also increasingly being buffeted by rising cost inflationary pressures, as rising commodity prices and higher import costs from the historically weak sterling exchange rate are being exacerbated by supply-chain capacity constraints and input shortages.'

"The annual MHA Manufacturing and Engineering report released last month found that despite the uncertainty from Brexit, the majority of businesses have achieved growth over the past 12 months and remain optimistic about the future", he said.

Commenting on the latest index, David Johnson, founding director at Halo Financial, said: "The increase in exports at a six and a half year high is a positive development for UK Manufacturing - one of the benefits of a weaker Pound". Sales have increased to Europe, China, the USA and South America.

"This will depend on factors such as actual fulfilment and value of orders, as well as cost pressures faced by businesses".

"By assessing and working to manage the currency risks posed by these key market influences, manufacturers can plan for rising costs and take steps to minimise their impact on the business".

Higher new orders, and a subsequent rise in production requirements, encouraged firms to increase their purchasing activity at the end of the third quarter. "There were also reports of rising cost inflation affecting production levels".

In August, Poland's PMI inched up to 52.5 from 52.3 in July.