Manufacturing picked up in April, an industry survey suggests, as the lower Australian dollar helped boost overseas demand for Aussie products.
“Food and beverage manufacturers reported higher than usual demand for this time of year with the lower Australian dollar supporting export orders, but also higher input prices for local foods,” the Ai Group said after releasing its Australian Performance of Manufacturing Index on Wednesday.
The food and beverages sector – which employs 27 per cent of manufacturing workers – recorded its highest result since March 2016, Ai Group chief executive Innes Willox said.
The lower currency also lifted the sector trend reading for building materials on robust overseas demand, rising 3.3 points to 57.6 points – above the 50-point mark separating expansion and contraction in activity.
“Exports were particularly strong in April, with the lower Australian dollar helping to increase exports orders,” the report said, adding that this offset local demand for building-related products and furnishings which had dropped sharply in 2019.
The survey indicated two sectors – metals and machinery – out of the six categories monitored by the PMI fell again during the month.
“Both the metal products and ‘machinery and equipment’ sectors contracted further in April, weighed down by flow-on effects from drought and the downturn in construction activity along with some reported hesitancy to invest associated with the upcoming federal election,” Mr Willox said.