Manufacturing Index Declines, Demand Slows Down

The latest performance of manufacturing index (PMI) declined some 4.1 points to 40.2 in December. According to the Australian Industry Group, this is the lowest level since three and a half years ago.

The number is also below the 50 level, which is the threshold between expansion and contraction.

The latest PMI data also showed that production declined 2.1 points and demand for new orders declined 6.3 points. The employment index also fell 4.4 points and demand for labour continues to be weak.

Innes Willox, chief executive of Australian Industry Group, said that the decline in the domestic economic growth is making things worse for the manufacturing sector. He added that pressures continue to mount and are now aggravated by the economic slowdown.

Willox also said that the rate cuts implemented by the Reserve Bank of Australia have not turned things around for the manufacturing sector.