Manufacturing slumps to one-year low

Thursday, 1 Sep 2016 12:04:43 | Rebecca Hyam Rebecca Hyan

AiG's Manufacturing Index dropped to its lowest level in over a year. (AFP)

A downturn in food and beverage production drove a slump in the country's manufacturing sector in August, sending a key measure of activity to its lowest point in more than a year.

The Australian Industry Group's Performance of Manufacturing Index plunged 9.5 points last month to 46.9.

The result broke a 13-month period of unbroken expansion and pushed the index to its lowest level since June 2015.

The Ai Group's chief executive Innes Willox attributed the downturn to a sharp fall in food and beverages in August, which had been the mainstay of recent growth.

But he said other manufacturers also struggled last month.

"Conditions deteriorated for manufacturers of non-metallic mineral products, and the recent growth spurt in the metals products sub-sector came to an end," he said.

The broader manufacturing industry saw production, sales employment and stocks all fall last month, but Mr Willox said there is some hope going into the final quarter of the year.

"Continued growth in new orders is a ray of optimism for a sector keen to avoid this correction becoming a downturn.

"The continuing patchiness both of the manufacturing sector and the broader economy, underscores the importance of lifting confidence and improving policy settings in areas such as workplace relations, taxation and budgetary policy."

AustraliaPlus

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Manufacturing slumps to one-year low

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