Australian industry index falls in Apr, contraction for last 24 months

The activity/sales indicator slipped further in April, falling by 3.6 points to minus 8.9. It has now been negative for 22 consecutive months.

On a trend basis, the industrial activity indicator reached a low point around the new-year period, and has been recovering across early 2024, the Group said in a release.

The employment indicator fell slightly by 2.2 points in April, but remained positive at 2.0. Employment has been strengthening since last winter.

Survey respondents reported difficulties in recruiting skilled labour and weak sales conversion rates particularly from the construction sector.

New orders fell by 3.1 points to minus 20 in April, following a 0.4-point fall in March. New orders have been recovering since a low around the new year period, but the indicator continues to point to significant contraction.

The improvement in input volumes continued in April, and in trend terms volumes have returned to neutral.

Businesses report continuing supply chain disruptions, alongside lower purchasing demand as new orders and input volumes fall.

Growth in input prices and average wages indicators slowed in April, while it increased for sales prices. Sales prices rose modestly by 2.6 points to 18.7.

The Australian purchasing managers’ index (PMI) dropped by 6.9 points further into contraction (minus 13.9) in April. However, in trend terms the PMI has been slightly improving across 2024.

Manufacturers reported rising input and utilities prices, while facing soft market demand and sluggish export orders to some regions.

Capacity utilisation in Australian industry moved slightly downwards to 80.2 per cent in March. This followed a downward trend seen since last year capacity utilisation ranged between 79-82 per cent for most of 2023.

However, the historically high-capacity utilisation continued to reflect supply-side constraints, particularly for labour supply.

Fibre2Fashion News Desk (DS)