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SYDNEY, Feb 1 Asia Pulse - Growth in Australia's manufacturing industry slowed in January, due to weakening demand, supply shortages and the drought, new figures show.
The Australian Industry Group/PricewaterhouseCoopers Australian performance of manufacturing index (PMI) fell 1.1 points in January to a reading of 51.3.
However, the results remained above the 50 point level for the sixth straight month, indicating that the industry continued to expand.
Ai Group chief executive Heather Ridout said growth in both new orders and exports slowed sharply in January, largely reflecting the impact of higher interest rates and pressure from lower-cost competitors.
"The drought and shortages of skilled labor and raw materials also continue to be cited as major constraints by many manufacturers," she said.
"While the recent fall in energy costs and the apparent peaking in inflationary pressures offer some potential relief down the track, consumer caution and the continued softness in the south east states together with lingering supply shortages, remain major headwinds for the sector in 2007."
The index found that the drop in new orders and exports growth during the month contributed to a more moderate expansion in production.
Source: HighBeam Research, AUSTRALIAN MANUFACTURING GROWTH SLOWS IN JANUARY.