The Australian Industry Group Australian Performance of Manufacturing Index fell 7 points from a month earlier to 51.3 in November 2018, the lowest reading since October 2017. The new orders index fell into contraction for the first time since September 2016 (-10.1 points to 48.7), suggesting tougher conditions ahead for manufacturers in some sectors. Other key indexes dropped: production (-9.8 points to 51.8); employment (-3.2 points to 49.4); supplier deliveries (-6.5 points to 54.4); exports (-4.3 points to 50.8); and sales (-7.2 points to 52.6). On the other hand, the gauge measuring finished stocks rose 1.4 points to 57.4. On the price front, input cost inflation picked up while selling prices increased at a softer pace. The average wage index fell below its historical average in November, indicating that fewer manufacturing businesses lifted wages than in the preceding months. Manufacturing PMI in Australia averaged 50.61 from 2001 until 2018, reaching an all time high of 63.10 in March of 2018 and a record low of 30.86 in February of 2009.
Manufacturing PMI in Australia is expected to be 57.10 by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Manufacturing PMI in Australia to stand at 54.37 in 12 months time. In the long-term, the Australia Manufacturing PMI is projected to trend around 52.00 in 2020, according to our econometric models.