Australia’s Manufacturing Sector Still Weak: Ai Group

The Ai Group Industry Index for Australia’s manufacturing sector rose by 2.9 points to -20.9 in August, showing slight improvement but still deep in contraction.

Manufacturing has remained flat in trend terms over the past year, as firms contend with rising costs, weak demand, project delays, and policy uncertainty despite some export gains.

Results varied across subsectors: chemicals fell 3.2 points to -19.8, minerals and metals eased 0.7 points to -16.7, and machinery and equipment slumped 18.9 points to -30.7 amid supply chain pressures and softer demand.

Food, beverages, and TCF improved by 13.7 points to -21.1, supported by seasonal orders ahead of Christmas, though energy costs and domestic uncertainty remained challenges.

Overall, manufacturing showed early signs of recovery in August, but conditions stayed weak across much of the sector.