The Ai Group Australian Performance of Manufacturing Index (Australian PMI®) dropped 3.2 points to 49.3 points in August 2022, indicating a slight contraction (seas. adj.). This is the first time the index has contracted since January 2022 following the Omicron outbreak during the summer break. Results below 50 points indicate contraction, with lower results indicating a faster rate of contraction.

• Manufacturing fell to be broadly stable in August for the first time in six months. Activity was lower in all sectors but chemicals and TCF, paper and printing.
• Labour challenges and supply chain disruption continue to plague manufacturing as in previous months. While new orders continued to grow in August the pace of growth eased and sales fell, indicating a negative direction for demand. Most manufacturing activity indicators contracted at an accelerating rate.
• The falling employment index reflects labour shortage pressures, with wages rising sharply.
• Manufacturing exports declined further; businesses reported volatile export demand.