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.