The AIG Australian Performance of Manufacturing Index declined to 51 in March of 2019 from 54 in February. The reading pointed to the weakest expansion in factory activity in three months, with some respondents attributing it to a general slowing in the economy while others said their customers are delaying orders until after the Federal election. The downturn in local housing construction is affecting demand for building-related manufactured goods. A slowdown was seen in production (-5.8 to 52.8), employment (-1.1 to 56.6), new orders (-2 to 50) and exports (-4.5 to 50.7) and contractions were reported for finished stocks (+1.6 to 46.1) and sales (-8 to 46.4). Also, input price inflation eased (-5.9 to 65.1), selling prices increased faster (+1.4 to 53) and average wages rose more (+1.7 to 61.2). Manufacturing PMI in Australia averaged 50.57 from 2001 until 2019, reaching an all time high of 62.50 in March of 2018 and a record low of 29.47 in February of 2009.
Manufacturing PMI in Australia is expected to be 53.50 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 53.20 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.