Weak demand pummels manufacturing

Written on the 13 May 2009

MANUFACTURING activity has fallen for the 11th consecutive month.

Producers cut inventories at the fastest rate in the index’s history in the face of a continuing drop in demand for new goods.

The seasonally adjusted Australian Industry Group - PricewaterhouseCoopers Australian Performance of Manufacturing Index fell by 3.1 points to a record low of 30.1 which is well below the 50-point mark that separates expansion from contraction.

Ai Group chief executive Heather Ridout, says there was no let-up for manufacturers in April, with weakness and uncertainty continuing to characterise the sector.

"Weak demand in both domestic and global markets contributed to the ongoing contraction of the sector. However, the inventory index is at record lows, which should suggest that production levels will have to lift soon to replenish stocks," she says.

"The infrastructure roll-out and lift in housing starts have the potential to translate into new orders for local industry. However, a concerted effort to ensure that Australian-based companies are aware of the opportunities and have a fair and open access to them is important. Ai Group will be pushing this agenda.’

Graeme Billings from PricewaterhouseCoopers Industrial Manufacturing, says the latest results clearly illustrate the ongoing squeeze on manufacturers’ profitability.

"Cutting back expenditure for marginal activities forms part of the strategy for underpinning profit margins until markets recover," he says.

"However, looking beyond the downturn remains important for long-term profitability. Retaining skilled workers, building supply chains to reduce costs and innovation across processes and products remain critically important."

While manufacturing activity fell in all states, the largest falls were recorded in Western Australia and South Australia.


Latest News

COCHLEAR R&D INVESTMENT DRIVES NEW PRODUCTS AND BOOSTS PROFIT AND REVENUE

COCHLEAR (ASX: COH) has boosted its 2017 full year net profit by 18 percent to $223.6 million and has forecast furthe...

WESFARMERS BOOKS BUMPER PROFIT BUT SUPERMARKET WAR HITS COLES' BOTTOM LINE

SUPERMARKET giant Coles has posted its biggest slide in earnings since it was acquired by Wesfarmers (ASX: WES) 10 ye...

TREASURY WINES UNCORKS SWEET $269M PROFIT DESPITE INVENTORY WOES

REVEALING the fruits of its past year of labour, Treasury Wine Estates (ASX: TWE) has posted a 55 per cent increas...

TATTS GROUP POSTS PROFIT AND REVENUE DROP ON FEWER JACKPOTS AND BAD WEATHER FOR RACING

TATTS Group (ASX: TTS) has posted a full year net profit loss of 5.7 percent and a revenue decline of 8.4 per cent as...

Related News

WESFARMERS BOOKS BUMPER PROFIT BUT SUPERMARKET WAR HITS COLES' BOTTOM LINE

SUPERMARKET giant Coles has posted its biggest slide in earnings since it was acquired by Wesfarmers (ASX: WES) 10 ye...

ANALYSTS PREDICT WHAT AUSSIE LIVING IS LIKELY TO BECOME IN THE NEXT CENTURY

AS THE Australian population continues to grow, analysts are predicting what the country is likely to look like wi...

SEVEN WEST REPORTS MASSIVE LOSS AND CUTS CEO TIM WORNER'S PAY PACKET BY $450K

SEVEN West Media (ASX: SWM) has posted a full-year loss of $744.3 million and cut CEO Tim Worner's pay packet by ...

HOW MAKING MISTAKES AND PASSION SCORED WEIGHT LOSS PARTNERS A DEAL WITH SHARK TANK'S JANINE ALLIS

THEY partnered up to provide a scientific and targeted approach to dieting, and Kate Save and Geoff Draper cut Sha...

BOOK YOUR FUNCTION SPACE HERE

 

 

 

Contact us

Email News Update Sign Up Contact Details
Subscriptions

PO Box 2087
Brisbane QLD 4001

LoginTell a FriendSign Up to Newsletter