Australia Manufacturing Contraction Softens but Remains Fragile

2026-06-30 23:07 By Chusnul Chotimah 1 min. read

Australia’s Ai Group Industry Index for manufacturing increased 4.5 points to -16.8 in June 2026, marking the highest level since February and signaling an easing in the contraction, though conditions remained fragile.

Manufacturers faced rising material costs, patchy demand, constraints on raw material availability, and higher business costs.

Meanwhile, constructors reported reduced orders, prompting some firms to reassess their workforce needs.

Upstream, chemical producers reported the sharpest contraction since July 2024 due to weak sales, citing low customer confidence, high raw material prices, and rising freight costs.

Meanwhile, metals producers reported growing competition, partially offset by a strong project pipeline anchored in mining and construction activity.

Downstream, machinery and equipment makers cited subdued customer demand, freight delays, and weaker capital investment.

Food and beverage producers reported improving demand despite ongoing economic uncertainty.



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Australia Manufacturing Contraction Softens but Remains Fragile
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