Australian PMI: Mild manufacturing rebound in November

The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) rose by 4.4 points to 54.8 in November – the first month of improvement following three months of flat results for the Australian PMI® (readings above 50 points indicate expansion in activity, with higher results indicating a faster rate of expansion).

All activity indexes in the Australian PMI® expanded or were stable in November, with the continued expansion of forward orders indicating further recovery is likely with the easing of remaining restrictions.

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Ai Group Chief Executive Innes Willox said: “The Australian manufacturing industry grew more decisively in November after a few flat months during which the south-east corner of the country was held back by the delta outbreaks and associated activity restrictions and while the states and territories tightened barriers to the movement of people. With restrictions easing, performance improved across the manufacturing sectors with a sharp rebound in food & beverages backed by strong growth among machinery & equipment, metal products and building products manufacturers. Production rose modestly while domestic sales and employment were broadly unchanged from October’s levels. Exports bounced back into growth, continuing the patten of volatility seen over recent months. Supplier deliveries and finished stocks were both firmer and new orders stretched its run of improvements to 14 months. Manufacturers are operating at relatively high capacity and continue to voice concerns about reliability of the supply of inputs and the difficulty in filling new positions due to worsening skill shortages and localised labour shortages. While input prices remain high and wages growth has firmed, market conditions are supporting some recovery of higher costs in market pricing of manufactured goods,” Mr Willox said.

Australian PMI®: Key Findings for November 2021

  • All manufacturing sectors in the Australian PMI®, expanded in November with the exception of chemicals, which indicated stable conditions (down 6.4 points to 50.6). Food & beverages rose sharply into growth (up 19.9 points to 57.3), mostly offsetting a large fall the previous month, while metal products also saw a lift from contraction to expansion (up 7.8 points to 56.4).
  • All seven activity indices in the Australian PMI® expanded or were stable in November (see table below), with deliveries (up 12.2 points to 53.4), stocks (up 7.0 points to 58.6) and exports (up 8.5 points to 54.6) increasing significantly following fairly weak results in October. New orders continued to expand at a relatively strong pace (up 1.0 points to 59.3).
  • The input prices index eased slightly in November (down 3.5 points to 78.3) but remained elevated as manufacturers continued to report high freight costs and difficulties sourcing inputs. The selling prices index reached a series high (up 4.2 points to 68.1), indicating that manufacturers continued to pass on some of their cost increases to their customers.
  • The average wages index eased but remained elevated in November (down 1.3 points to 62.4) as skilled labour shortages, vaccination requirements and staff in isolation combined to reduce staff availability and to increase wages pressures.

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Seasonally adjustedIndex this monthChange from last monthLong-run average
Australian PMI®54.84.450.8
Production52.54.751.5
Employment50.02.049.2
New Orders59.31.051.6
Supplier Deliveries53.412.250.9
Finished Stocks58.67.049.9
Exports54.68.550.1
Sales50.60.449.5
Input prices78.3-3.567.9
Selling prices68.14.249.0
Average wages62.4-1.358.8
Capacity utilisation (%)78.51.874.3
Seasonally adjustedIndex this monthChange from last monthLong-run average
Food & Beverages57.319.953.8
Machinery & Equipment55.80.450.3
Metals products56.47.847.5
Petroleum, coal, chemicals & rubber products50.6-6.451.7
Building, wood, furniture & other56.91.350.1
Textiles, clothing, footwear, paper & printing51.3-1.347.0

Results above 50 points indicate expansion.

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