FX.co ★ Australian Industry Conditions Improve: Ai Group

The Ai Group Australian Industry Index made a significant leap in July, climbing 5.8 points to reach -3.2. This figure marks the index's most robust performance in three years and signifies a continued recovery trend that has been evident since mid-2024. New orders experienced a resurgence, improving by 6.8 points to -4.9, and input volumes nearly balanced at -0.3, achieving their highest level since April 2024. Some businesses reported an uptick in customer inquiries. However, ongoing uncertainties persist due to global tariffs and weak consumer confidence. The sales index also saw gains, improving to -8.1, the most favorable result since August 2022, as the upward trend momentum began to solidify. Nonetheless, the employment index dipped slightly to -4.0, with ongoing challenges in staffing, particularly in the construction-related and labor hire sectors. Input prices surged sharply by 11.1 points to 47.9, while sales prices experienced a slight decline. This widened the cost-to-price gap to 43.4, thereby intensifying pressure on profit margins. Despite the rise in input costs, wages, and utility expenses, numerous firms are finding it difficult to transfer these increased costs to their customers.