Strong Australian dollar restricts manufacturing growth in March: survey

The Australian manufacturing activity declined in March, as the strong Australian dollar together with weak domestic demand, rising overseas competition and the increasing cost of raw materials hurt manufacturers, according to an industry survey released on Friday.

The Australian Industry Group/PriceWaterhouseCoopers, Australian Performance of Manufacturing Index (PMI) fell 3.2 points in March to 47.9.

Readings below 50 indicates that manufacturing is declining.

The decline in manufacturing activity was led by contractions in the clothing and footwear, food and beverages, textiles and fabricated metal sub-sectors, the survey said.

After a lift in February, new orders were down 3.2 points in March.

Queensland and Western Australia were the only two states to record manufacturing growth, the survey found.

"The major factor by a long way pressuring Australian manufacturing is the high dollar and this is predicted to remain high for a protracted period of time," Australian Industry Group Chief Executive Heather Ridout said in a statement accompanying the survey.

"The fall in the forward-looking new orders sub-index also suggests the weakness in manufacturing looks set to continue in the near term," she said.

Source: Xinhua

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