The AIG Australian Performance of Manufacturing Index climbed to 51.3 in July 2019 from 49.4 in the previous month, returning to expansion after falling into contraction in June for the first time in nearly three years. Growth was mainly driven by a 3.2-point climb in new orders (currently at 53.0) and employment (+3.1 points to 53.2). Also, exports rose 1.5 to 54.6, as strong overseas demand for Australian consumable manufacturing products such as food, beverages, pharmaceuticals, vitamins & cosmetics was reported. In contrast, production lost 3.6 points and fell to 48.3. On the price front, input costs declined 1.1 to 66.3 and selling prices edged down 0.4 to 49.2, while wages declined 2.8 to 56.9. Meantime, capacity utilization jumped 4.6 points to 81.3 percent. Manufacturing PMI in Australia averaged 50.77 from 1992 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 54.00 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 53.60 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.