Election uncertainty hurts manufacturing industry in Australia

10:07, September 01, 2010      

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The pace of growth in Australia's manufacturing industry slowed in August, with the ambiguity related to the federal election affecting demand in the sector, Australian Industry Group said on Wednesday.

The Performance of Manufacturing Index by the Australian Industry Group and PricewaterhouseCoopers fell 2.7 points to 51.7 last month. That was still above the key 50-point level, indicating expansion.

The index showed new orders and production experienced slower growth and the worst performing sub-sectors were food and beverages, as well as paper, printing and publishing. But strong mining, construction and infrastructure-related activity kept construction materials, basic metals and transport equipment in positive territory.

The Australian Industry Group's chief executive, Heather Ridout said while the August result marks the eighth consecutive month of expansion, manufacturers still face challenges.

"Election uncertainty, together with intense import competition and other ongoing impacts of a strong Australian dollar, is generating headwinds for manufacturers," Ridout told The Australian newspaper on Wednesday.

"Manufacturers have enjoyed a gradual expansion since the start of the year and although August saw a decline in the pace of growth and new orders were flat, there are indications that the pace of recovery could strengthen in the months ahead.

"In particular, the stronger performance of the clothing and footwear and wood products and furniture sub-sectors is encouraging and suggests that consumer demand may be picking up," she said.

PricewaterhouseCoopers global head of industrial manufacturing, Graeme Billings said the pick up in the sector is taking longer to play out than initially forecast.

"The recovery in manufacturing is proving to be somewhat slower than many have expected," Billings told The Australian newspaper.

"In August, political uncertainty detracted from overall performance, adding to the range of challenges confronting both the sector and the broader economy.

"While manufacturing is still recovering, we are not yet seeing the sort of impetus from the private sector that is needed to underwrite aggregate growth at a time of receding public sector demand."

Source: Xinhua

(Editor:张洪宇)

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