Manufacturing activity in Australia continued to contract for the eighth consecutive month in October due to strong Australian dollar, softer demand in export markets and higher energy charges, a monthly survey released on Thursday by the Australian Industry Group (Ai Group) found.
The Ai Group Australian Performance of Manufacturing Index was up 1.1 points to 45.2 in October, but still well below the 50 mark that divides expansion from contraction.
The latest survey found the new orders sub-index dropped a further 0.4 points to 43.9 in October while the only sub-sectors to expand in the month were paper, printing and publishing and transport equipment.
Ai Group said the high Australian dollar, stronger import competition and rising energy prices were some of the factors that inhibited the growth in October.
"Manufacturers continue to find the going very tough in the face of the strong dollar, weaker demand in export markets and flat conditions across the non-mining sectors of the domestic economy, particularly in commercial and residential construction which has strong linkages with domestic manufacturing," Ai Group Chief Executive Innes Willox said in a statement.
"The current contraction in Australian manufacturing is comparable to that being experienced by manufacturers in the recession-hit euro zone even though the Australian economy is growing relatively strongly overall," he said.