The Australian Industry Group (Ai Group) Performance of Manufacturing Index for September showed a faster contraction than August with stage four restrictions in Victoria taking a toll.
Nationwide the PMI fell by 2.6 points to 46.7. Victoria, New South Wales and Queensland all reported declines, while South Australia’s index rose due to its high number of food and beverage processors, machinery and equipment suppliers and close supply chain links to local agriculture.
The food, beverages & tobacco sector produced $26.5 billion in real value-added output in the year to Q2 2020 (25per cent of manufacturing real value-added output). It employed 234,000 people in August 2020 (27 per cent of manufacturing employment, ABS data).
The index for food and beverages (the largest of the manufacturing sectors) eased by 0.3 points to 57.7 points in September, indicating a slightly slower expansion than in August (trend).
Food & beverage manufacturers noted stronger production and new orders in September. Some manufacturers reported a loss of sales to their regular retail, hospitality, and tourism customers due to the lack of international tourists and local spending.
The manufacturing industry produced $103.7 billion in real value-added output in the year to Q2 2020 (5.5 per cent of GDP). Manufacturers’ value-added output was lower (-1.5 per cent q/q) in Q2 of 2020 and fell by 1.5 per cent over the year to Q2 2020 (ABS data).
AI Group chief executive Innes Willox said the contraction was a timely reminder COVID-19 recovery will be tentative and prone to periodic setbacks.
