The manufacturing sector in Australia showed signs of continued contraction in August, though the rate of decline has slowed, according to the latest survey from Jufo Bank. The report, released on Monday, indicated a manufacturing PMI score of 48.5.
While this score reflects an improvement from July's 47.5, it remains below the critical threshold of 50 that distinguishes expansion from contraction.
Manufacturing production decreased in August at its most rapid pace since March, driven by a significant reduction in new orders. Australian manufacturers frequently attributed this downturn to the negative effects of high interest rates and muted demand conditions. However, foreign demand showed improvement as new orders from international markets rose for the first time since May.
The uptick in export orders was particularly notable, achieving its highest rate of increase since September 2022. Australian manufacturers cited mainland China and Southeast Asian economies as key sources of these export orders. The decline in overall new orders led to a further reduction in backlogged work for August. This lack of capacity pressure resulted in workforce reductions for the third consecutive month.
