Manufacturing still struggling
By | theage.com.au | 20 June
Australia's manufacturing sector continues to struggle with high interest rates and an uncertain global outlook, a survey says.
The Australian Industry Group-PricewaterhouseCoopers Australian Performance of Manufacturing Index (PMI) fell 1.5 index points in May to 51.2 points.
Last month's fall more than erased April's slender 0.4 point increase.
The index is now only barely above the key 50 point level, which separates expansion from contraction.
Australian Industry Group chief executive Heather Ridout blamed increasing energy prices and a higher Australian dollar for the slowing manufacturing activity.
"The fact that these pressures have been sustained for a long period of time have compounded the impact on the industry," Mrs Ridout said in a statement.
"Industry is going to have to work even harder on lifting competitiveness in order to maintain profitability and market share."
Ms Ridout said the Reserve Bank of Australia (RBA) needed to consider the plight of the manufacturing sector when it came to interest rates.
"Monetary policy needs to have an eye on the extraordinary pressures, which this large and very important sector of the economy continues to experience," Mrs Ridout said.
A softening in domestic demand was reflected in a significant fall in new orders in the month.
AAP
First published by TheAge.com.au on June 20 2008
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