The manufacturing sector in Australia experienced a continued contraction in September, with the contraction accelerating, according to the latest Judo Bank survey released on Tuesday. The survey reported a manufacturing Purchasing Managers' Index (PMI) score of 46.7, down from 48.5 in August. This figure falls further below the critical threshold of 50, which demarcates expansion from contraction.
A key factor in the deepening downturn of the manufacturing sector was the decline in new manufacturing sales. New orders for Australian manufactured goods decreased at the fastest rate observed outside the pandemic period. This decline was largely attributed to the adverse effects of elevated interest rates and weakening market conditions. Export orders were notably affected, falling sharply amidst deteriorating foreign demand.
Consequently, manufacturing output contracted at one of the sharpest rates on record, and the level of unfinished work saw a significant decline in September. In response, Australian manufacturers reduced staffing levels as workloads diminished.
