Labour challenges, supply chain disruptions and high energy prices remain major constraints on manufacturing, according to AI Group’s Manufacturing Index for July. The TCF, paper & printing products sector was down 7.8% but remains "strong."
|Index for TCF, paper & printing products sector|
The Ai Group Australian Performance of Manufacturing Index (Australian PMI) declined by 1.5 points to 52.5 points in July 2022.
The index for textiles, clothing, footwear (TCF), paper & printing products sector – employing 80,000 people - dropped by 7.8 points to be 59.4 points, easing from the recent peak in June but “remaining strong,” the report said.
“Manufacturing activity slowed in July. Most subsectors eased but the metal products sectors recovered strongly. Input prices declined for the first time since February 2022 but remain at very high levels.
“Labour challenges, supply chain disruptions and high energy prices remain the major structural constraints on manufacturing.”
The report found that manufacturing concerns included: fewer enquiries, weather conditions, delayed construction projects, inflationary cost pressures, supply chain difficulties, wage increases and uncertainty in the energy market.
“Some businesses indicated that their production levels were inhibited by staff absenteeism and the inability to fill entry level positions.
“Employment declined, reflecting labour shortage pressures on manufacturing businesses.
Most manufacturing activity indicators declined in July. However, new orders and sales strengthened, despite tight supply chain pressures.”