Australian Manufacturing sector back to expansionary territory

By FXstreet.com | Updated July 31, 2014 AAA

FXStreet (Bali) - The Australian Industry Group Australian Performance of Manufacturing Index came at 50.7 vs 48.9, marking the first move above 50.00 following eight months of contraction.

Key findings

"Many respondents to the Australian PMI® expressed renewed concern about the stronger Australian dollar, which has increased import competition and lowered demand and selling prices for locally made products again this month. Meanwhile, wages and input costs continued to grow, placing extra pressure on manufacturing businesses’ margins."

"Across the eight manufacturing sub-sectors in the Australian PMI®, only the large food and beverages (51.7 points) and the smaller wood and paper products (67.2 points) sub-sectors expanded in July. The metal products, machinery and equipment, and petroleum, coal, chemicals and rubber products sub-sectors continued to contract (i.e. below 50 points)."

"Four of the five activity sub-indexes were above 50 points in July, but they were only pointing towards a stabilisation or very mild expansion in conditions at best. Both the stocks and sales sub-indexes remained in contraction this month (i.e. below 50 points). More positively for the outlook, the new orders sub-index of the Australian PMI® stayed above 50 points (i.e. expansion) for the third month in July. Conditions deteriorated for manufacturing exports, reflecting the ongoing strength in the Australian dollar, which currently sits at around US$0.94."

Related Forex Analysis
  1. SEB: EUR/USD rechecked the neckline - eFXnews
    Forex News

    SEB: EUR/USD rechecked the neckline - eFXnews

  2. EUR/USD tests 1.2590 post-data
    Forex News

    EUR/USD tests 1.2590 post-data

  3. EUR/USD targets to refresh October lows before CPI data
    Forex News

    EUR/USD targets to refresh October lows before CPI data

  4. Outlook for EUR/USD still bearish - UOB Group
    Forex News

    Outlook for EUR/USD still bearish - UOB Group

  5. EUR/USD trading lower on Friday at 1.2564 - FXStreet
    Forex News

    EUR/USD trading lower on Friday at 1.2564 - FXStreet

Trading Center