Industry output on rise, says PMI study

ACTIVITY in Australia’s resurgent manufacturing sector has expanded for a ninth straight month, with factories buoyed by growth in sales and export levels, even as higher energy prices loom.

Manufacturing activity rose 0.2 points to 55 points in June, according to the Australian Industry Group’s monthly Performance of Manufacturing Index (PMI), with all subsectors expanding bar one.

That was the struggling textiles, clothing and furniture grouping, which is labouring at an all-time low of 29.2 points.

Readings above 50 in the index indicate an expansion.

Ai Group chief executive Innes Willox said sales, exports and production improved, with growth in new orders particularly promising.

The large machinery and equipment subsector was a standout at 60.1 points, its highest level since records began for the division in 2009.

But rising power prices are a threat to that momentum.

“Concerns about the impacts of further rises in energy prices are accumulating like storm clouds over the sector,” Mr Willox said.

“With policy uncertainties inhibiting investment in energy ... it is imperative that a sensible and bipartisan resolution be reached.”

Businesses in NSW, Queensland, and South Australia face higher electricity and gas costs from this week, while price rises in Victoria begin in January.

Small business customers of Origin Energy in SA face hikes of 15.3 per cent and 8.4 per cent on electricity and gas, respectively – an additional $1453 on their yearly power bills. The extra costs amount to about $1060 for NSW small businesses and $382 in Queensland.

Businesses using Energy Australia face additional electricity and gas costs of up to $387 a year, in SA’s case.