Australia Manufacturing Sector Deteriorates Further: Ai Group

EthereumCraftsman · 2026-02-03T22:24:02+00:00

Australia's manufacturing sector continued to contract in December/January, affected by weak overall conditions, declining demand, rising costs, and labor constraints, although some areas showed slight improvements.

EthereumCraftsman

2026-02-03 22:24:02

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The Ai Group Industry Index for Australia’s manufacturing sector remained in contraction in December/January, with overall manufacturing conditions still weak. Manufacturing trends were mixed, as subdued demand, tariffs, rising input and wage costs, weak cashflow and labour constraints continued to weigh on output, while limited pockets of improved orders offered only partial relief. The chemicals index fell sharply to -35.3 as seasonal slowdowns, market uncertainty and higher tariffs reduced sales. In contrast, minerals and metals improved to -25.9, supported by cheaper imported inputs and some lift in new orders, though softer holiday demand and export pressures persisted. The machinery and equipment index declined to -22.3 amid lower investment, higher costs, labour shortages and slower holiday orders, despite modest gains for some firms. Food, beverages and TCF eased to -9.4, with stronger festive-season sales offset by rising wage, input, energy and tax costs.

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