The Australian manufacturing sector continues to suffer, despite getting help from weak currency and lower interest rates. The Australian Industry Group's Performance of Manufacturing Index (PMI) was 42.0 in July, down 7.6 points from June. The below-50 reading shows activity in the sector is falling. Manufacturing hasn't posted a monthly rise since June 2011.
Manufacturers are telling us that, while the fall in the Australian dollar and the May interest rate cut have been extremely welcome, they have not yet been enough to turn around a very challenging business environment. The weakness in the currency has fuelled higher prices for imported inputs without any real corresponding improvement in stronger exports.
The Reserve Bank Of Australia (RBA) noted last month that survey-based measures of business conditions improved in May, but were still a little below long-run average levels. Over the past few months, measures of sentiment had improved for some industries, including construction and business services, and declined slightly for other industries, most notably mining and manufacturing.
While the volume of resources exports had risen further, and was expected to continue to grow with the addition of new capacity for bulk commodities, the decline in commodity prices over the past year or so had weighed on the resources sector. RBA noted that while mining investment remained at a high level, planning and development work related to future projects had declined significantly since the previous year.
Manufacturers are telling us that, while the fall in the Australian dollar and the May interest rate cut have been extremely welcome, they have not yet been enough to turn around a very challenging business environment. The weakness in the currency has fuelled higher prices for imported inputs without any real corresponding improvement in stronger exports.
The Reserve Bank Of Australia (RBA) noted last month that survey-based measures of business conditions improved in May, but were still a little below long-run average levels. Over the past few months, measures of sentiment had improved for some industries, including construction and business services, and declined slightly for other industries, most notably mining and manufacturing.
While the volume of resources exports had risen further, and was expected to continue to grow with the addition of new capacity for bulk commodities, the decline in commodity prices over the past year or so had weighed on the resources sector. RBA noted that while mining investment remained at a high level, planning and development work related to future projects had declined significantly since the previous year.
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Gold traded above a 10-week low as improvements in the U.S. economy were weighed against tension in Ukraine and signs of higher demand in China. Assets in the largest exchange-traded product held at the lowest in 12 weeks.
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