Ai Group Australian Industry Index

Data Macro PMI

Source: Ai Group
Source Link: https://www.aigroup.com.au/
Frequency: Monthly
Next Release(s): December 2nd, 2025 7:00 PM

Latest Updates

The Australian Industry Index® improved by 4.2 points to -11.2 seasonally adjusted in October.
- The employment indicator returned to neutral for the first time in 18 months, led upwards by improving access to labour supply in the construction industry.
- Construction rose in the month, and in trend terms has seen steady improvement over the last year as supply constraints ease while market conditions improve.
- Manufacturing performance continued to weaken, particularly in the metals sector which is struggling with high energy prices and global trade headwinds.
- Pricing indicators suggest that industry is beginning to raise prices again after a year of absorbing cost increases on the balance sheet.
The Ai Group Australian Industry Index fell -2.4 pts to -16.0 in September 2025, with manufacturing (-13.2) and construction (-12.3) both in contraction, reflecting weak demand, labor shortages, and intensified price competition.
- The Australian manufacturing PMI jumped 7.6 pts to -13.2, offsetting a sharp decline in the Australian construction PCI, down -12.4 pts to -12.3. However, the longer-term trend measure shows construction still stronger than manufacturing.
- Activity/Sales declined -3.2 pts to -15.8, as project delays and weak demand weighed on output.
- Employment fell -1.2 pts to -11.2, with firms citing skill shortages and wage pressures.
- New Orders edged down -0.8 pts to -13.7, signaling subdued forward demand, while Input Volumes slipped -2.1 pts to -13.5.
- Input Prices dropped sharply -17.6 pts to 27.2, the lowest since August 2020, indicating easing cost pressures.
- Sales Prices also fell -6.7 pts to 6.4, reflecting intensified competition and import-driven pricing pressure.
- Average Wages eased -1.9 pts to 32.0, marking a two-year low but still elevated relative to historical averages.
- Capacity utilisation weakened further to 77%, below the long-term range of 79–82%, consistent with ongoing labor and supply-side constraints.
The Ai Group Australian Industry Index fell -7.9 pts to -13.9 in August, reversing July’s financial-year boost and reflecting broad weakness across sales, employment, new orders, and input volumes.
- The Australian PMI® (manufacturing) rose slightly (+2.1 pts) but remained deeply negative at -20.9, while the PCI® (construction) improved +1.5 pts to 1.0, its first expansionary reading since October 2023.
- Sales activity slipped -3.3 pts to -12.1, with export demand outperforming but domestic orders lagging; new orders dropped sharply (-11.0 pts) to -17.8, signaling weak forward demand.
- Employment fell -4.9 pts to -9.8, consistent with a gradual softening in labor market conditions and challenges such as skilled shortages, wage competition, and absenteeism.
- Input volumes contracted heavily (-20.3 pts) to -14.8, reversing gains from earlier in 2025, while input prices eased -2.6 pts to 45.4; average wages also softened -6.5 pts to 34.7.
- Sales prices increased +8.8 pts to 14.4, indicating firms are beginning to pass on rising costs, narrowing but not eliminating the margin gap with high input prices.
The Ai Group Australian Industry Index rose +5.8 pts to -3.2 in July, its highest level in three years, led by gains in services and construction, though manufacturing remained deeply in contraction.
- The Australian PMI (manufacturing) improved +4.9 pts but stayed weak at -23.9, while the PCI (construction) rose +12.6 pts to -1.3.
- Activity/sales rose +6.1 pts to -8.1, marking the best level since August 2022.
- New Orders rebounded +6.8 pts to -4.9, continuing a gradual uptrend since mid-2024.
- Employment was steady, down just -1.8 pts to -4.0, reflecting persistent hiring challenges.
- Input prices surged +11.1 pts to 47.9 while sales prices edged down -1.1 pts to 4.6, widening margin pressures amid rising average wages (+4.5 pts to 42.4).
The Ai Group Australian Industry Index fell -1.8 pts to -11.9 in June, marking the 36th consecutive month of contraction, as manufacturing weakness continued to offset broader sector improvements.
- The Australian PMI (manufacturing) fell -5.5 pts to -29.3, while the PCI (construction) eased -7.4 pts to -14.9, reinforcing sectoral divergence.
- The contraction in sales activity eased slightly, improving 1.4 pts to 15.6 in June. Since reaching a recent trough at the start of 2024, the trend has shown gradual signs of recovery.
- Employment rose 6.6 pts to -1.9, approaching neutral for the first time since March 2024.
- New Orders edged down slightly to -13.8, maintaining a trend of gradual improvement since mid-2024.
- Input volumes dropped -8.9 pts to -11.7, reversing May’s gains and reflecting soft demand.
- Input prices declined to 36.5 and wages held at 36.8, signaling easing inflation pressures but ongoing margin constraints.
The Ai Group Australian Industry Index rose 4.2 pts to -12.3 in May, signaling continued contraction for the 35th consecutive month, though conditions are gradually improving from late 2024 lows.
- The Australian PMI (manufacturing) remained deeply negative at -23.5, while the construction PCI improved 1.0 pt to -6.4.
- Activity/sales rose 0.9 pts to -18.3 and new orders improved 9.0 pts to -10.3, but both remain in contraction.
- Employment climbed 6.2 pts to -9.6, continuing a slow upward trend but still reflecting contraction.
- Input prices surged to 47.6, while sales prices stayed weak at -5.9, widening the margin squeeze to its worst since early 2023.
- Average wages rose slightly to 38.8, contributing to persistent cost pressure across the sector.
The Australian Industry Index eased by 5.1 points to -15.0 seasonally adjusted in April and has been in contraction for the last 34 months.
- The Manufacturing Index increased 3.7 pts to -26.5, and the Construction Index jumped 10.8 pts to -7.9.
- The contraction in the activity/sales indicator eased in April, lifting by 7.1 points to -18.3. In trend terms the index has improved from the recent trough in mid-2024.
- Employment deteriorated further in April, falling 5.8 points to -18.2 points. Industrial employment has been contracting since mid-2024.
- Global trade settings, currency volatility, and the federal election all weighed on industrials in April. Short-run indicators improved slightly but forward indicators remain very weak.
- Uncertainty arising from US tariffs is having differential effects on industry. Construction and services are showing improvement, but trade-exposed manufacturing industries continue to weaken.
- The metals and machinery subindustries are showing particular weakness, with uncertainty surrounding tariffs and currency weighing on current performance and future outlook.
The Australian Industry Index fell slightly by -3.1 pts to -22.2 seasonally adjusted in March.
- Uncertainty factors – particularly disruptions caused by US trade policies, forex volatility and the Australian federal election – are now affecting industrial markets and activity.
- While cost pressures further ease the sales price indicator has fallen to neutral, indicating ongoing pressure on industrial margins.
- The activity/sales indicator contracted further in March, falling further by -7.7 pts to -31.5. The trend data points to falling industrial activity over the first quarter of 2025.
- Manufacturing and construction both performed poorly in March. While the construction indicator has improved since late 2024, manufacturing continues to point to entrenched contraction.