Australia Manufacturing Deteriorates the Most Since April 2020: Ai Group

2026-03-31 22:07 By Felipe Alarcon 1 min. read

The Ai Group Industry Index for Australia’s manufacturing sector fell to -27.9 in March marking its sharpest monthly drop since April 2020.

Manufacturing trends remained weak as customer confidence and intensifying costs from fuel and freight weighed on output while inventory building offered only partial relief.

The chemicals index increased to -18.1 as large projects boosted volumes despite rising energy costs and supply disruptions.

In contrast minerals and metals fell to -30.2 hindered by reduced export demand and shipping delays though some firms brought orders forward.

The machinery and equipment index increased to -26.2 amid improved orders for some despite stronger import competition and material sourcing difficulties.

Food beverages and TCF fell significantly to -33.2 with higher interest rates and fuel costs weighing on customer demand and operating costs alongside competition from overseas suppliers.

Capacity utilization also declined to 73.7% amid these pressures.



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Australia Manufacturing Deteriorates the Most Since April 2020: Ai Group
The Ai Group Industry Index for Australia’s manufacturing sector fell to -27.9 in March marking its sharpest monthly drop since April 2020. Manufacturing trends remained weak as customer confidence and intensifying costs from fuel and freight weighed on output while inventory building offered only partial relief. The chemicals index increased to -18.1 as large projects boosted volumes despite rising energy costs and supply disruptions. In contrast minerals and metals fell to -30.2 hindered by reduced export demand and shipping delays though some firms brought orders forward. The machinery and equipment index increased to -26.2 amid improved orders for some despite stronger import competition and material sourcing difficulties. Food beverages and TCF fell significantly to -33.2 with higher interest rates and fuel costs weighing on customer demand and operating costs alongside competition from overseas suppliers. Capacity utilization also declined to 73.7% amid these pressures.
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