FX.co ★ Australia Manufacturing Slump Deepens in June : Ai Group

The Ai Group Industry Index indicates a further decline in Australia's manufacturing sector, dropping to -29.3. This downturn has been exacerbated by unfavorable weather conditions, escalating input costs, and trade uncertainty, which have collectively dampened buyer confidence. As a result, many manufacturers have resorted to offering discounts and adopting flexible payment terms. The performance of upstream indicators showed variability: the chemicals index rose by 12.8 points to -22.4, buoyed by stronger exports to regions such as the UAE and South America, despite ongoing structural challenges like droughts and high import costs. Conversely, the minerals and metals sector experienced a significant decline, falling by 23.9 points to -31.2, reversing gains made in May due to weak demand, increasing rates, and stiff competition. The machinery and equipment sector saw a modest rise of 7.1 points to -41.4, although companies are grappling with transport limitations, tariff pressures, and subdued demand from the agriculture sector. Nevertheless, some positive developments were noted from renewable energy projects and orders following the election. Meanwhile, the food and beverages sector dropped by 14.4 points to -23.4 amid challenges such as low tourism, reduced alcohol consumption, and staffing issues contributing to decreased demand.