Australia Manufacturing Remains Weak Despite Uptick: Ai Group

The Ai Group Industry Index for Australia's manufacturing sector rose by 4.9 points to -23.9 in July, showing slight improvement but signaling continued deep contraction.

Manufacturers cited persistent cost pressures, weak demand, policy challenges, and rising overseas competition as key obstacles.

Trade risks and elevated energy costs continue to hinder recovery, leaving the sector lagging behind other parts of the industrial economy.

Upstream sectors like chemicals and minerals showed some improvement, with the latter benefiting from stronger infrastructure-related orders despite ongoing supply chain and labor challenges.

Machinery and equipment saw the biggest gain, though global uncertainty and limited capital spending remained headwinds.

Meanwhile, the food, beverages, and TCF sector weakened further, dragged down by tariff-related export uncertainty, rising input costs, and softer local demand.