Australia’s manufacturing sector remained in contraction in February, with the Ai Group Industry Index at -15.6, indicating persistently weak conditions. Performance across manufacturing sub‑sectors was mixed. Soft demand, rising regulatory, tax and energy costs, and cash-flow pressures from payment delays continued to suppress output, while only tentative signs of improvement emerged in some areas.
The chemicals index deteriorated to -27.3, as subdued demand, higher input costs and weather-related disruptions weighed on sales. The minerals and metals index held steady at -22.6, supported by pockets of stronger ordering activity, although overall demand remained weak and cost pressures continued.
The machinery and equipment index fell to -24.2, reflecting persistent regulatory burdens and sluggish capital investment, despite modest gains for some businesses. In contrast, the food, beverages and textiles, clothing & footwear (TCF) segment improved slightly to -4.6, with seasonal orders and promotional activity partly offsetting falling retail sales, tariff concerns and ongoing cash-flow strain.
