Australia Manufacturing Shows Modest Improvement: Ai Group

The Ai Group Industry Index for Australia’s manufacturing sector rose 7.6 points to -13.2 in September, showing slight improvement but remaining in contraction. Manufacturing trends have been steady, with soft demand, rising costs, and labor shortages weighing on activity, though exports and strong local orders provided some relief. Upstream indicators continued to contract: the chemicals index fell 5.1 points to -25.2 amid competition, skill shortages, drought impacts, and regulatory pressures, though export demand to the Middle East and Asia offered some support. Minerals & metals declined slightly to -15.9, affected by higher energy and wage costs, weak customer confidence, and raw material disruptions. The machinery & equipment index improved 11 points to -18.2, driven by new construction demand. Food, beverages, and TCF rose 16.3 points to -4.7, the highest since February, as firms increased orders and promotions, though slower trading and concerns over US tariffs persisted.