Australia: Manufacturing conditions remain above average - Westpac

Simon Murray, research analyst at Westpac, points out that the Australia’s Westpac–Chamber Actual Composite index declined in December 2018 to 63.1 from 66.2 in September and has indicated positive manufacturing conditions since December 2016.

Key Quotes

“The well above average reading for the Composite index reflects strength in new orders, output, overtime and order backlog. The Australian economy has expanded around trend in the year to September 2018, annual output growth tracking at 2.8%.”

“Manufacturing is benefitting from: an upswing in non-residential construction, particularly public infrastructure investment with a number of projects still to begin; a relatively low Australian dollar boosting competiveness for exporters and import-competing firms; and a robust global growth backdrop despite some slowing of late. Against this, the drought in New South Wales and Queensland has created difficulties for agriculture and consequently the manufacturers who work with the sector.”

“Overall expectations are positive centred on new orders, output, backlog, overtime and employment. The Expected Composite rose to 63.5 in December from 61.1 in September.”