Pete Wargent blogspot

CEO AllenWargent Property Buyers, & WargentAdvisory (institutional). 6 x finance author.

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Monday, 1 May 2017

Manufacturing index pushing 15-year high

Manufacturing recovering

Another very strong result for AIG's Manufacturing Index (PMI) increasing by 1.7 points to a massive 59.2, miles above the 50 reading that denotes expansion or contraction. 

Source: AIG

The index trend has been tracking at levels not seen since 2002 - before the higher dollar associated with the mining boom began to hollow out the manufacturing sector. 

Manufacturing employment underwent a significant bounce from 2015.

However, the most up to date figures suggest that the recovery had stalled, at least from an employment perspective.

Given the structural and global decline in manufacturing employment in developed economies, it's unrealistic to expect too many of the manufacturing jobs lost to be coming back. 

A major point of concern for Australia is the huge reliance on construction employment, even over the year to February 2017.

Let's see what the May Budget comes up with in terms of infrastructure planning.