The Ai Group Australian Industry Index rose by 9.0 points to -1.5 (seasonally adjusted) in February. While the indicator has continued its recovery through 2025, overall activity remains broadly flat. Domestic demand stayed subdued amid soft trading conditions, and regulatory pressures, skills shortages, and rising input costs continued to constrain activity. These headwinds were partially offset by strong growth in business services and higher conversion rates from enquiries to orders.
The employment index turned positive for the first time in three years, lifting to +12.8. This suggests firms are holding on to staff in anticipation of a gradual recovery, despite ongoing scarcity of skilled labour. New orders strengthened in February, rising 11.4 points to -2.1 as work scheduled for 2026 began to come through. Input volumes also increased sharply, climbing to 8.1 and returning to positive territory.
Price indicators pointed to continuing cost pressures: input prices rose further, sales prices remained stable, and wages stayed elevated.
