Australian Manufacturing Expands at Fastest Pace in Two Years
Australian manufacturing expanded at the fastest pace in more than two years, adding to evidence of economic rebound that may prompt the central bank to boost borrowing costs tomorrow for the fourth time in five meetings.
The performance of manufacturing index rose to 53.8 points in February from 51.0 in January, according to an Australian Industry Group and PricewaterhouseCoopers survey released in Canberra today.
A reading above 50 signals manufacturing is expanding and gives central bank Governor Glenn Stevens more scope to increase the benchmark lending rate tomorrow by a quarter percentage point to 4 percent, as forecast by 14 of 19 analysts surveyed by Bloomberg News. Australia’s economy probably grew the most in 1 1/2 years in the fourth quarter, a separate analysts’ survey ahead of a report on March 3 shows.
“While there is a lot of ground lost over the past two years still to be recovered, overall, conditions do appear to be improving,” AIG Group Chief Executive Officer Heather Ridout said payday loans. “The combination of rising new orders and production augers well for the industry in coming months.”
The manufacturing survey, which is similar to the U.S. ISM index, asked more than 200 companies about production, new orders, deliveries, inventories and employment.
A gauge of production rose 4.2 points to 55.7, the sixth increase in seven months, today’s report shows. Growth was strongest among manufacturers of textiles and paper, as well as publishing companies. An index of orders was little changed at 56 in February.
Today’s survey also shows that companies related to consumer spending have weakened.
“The impact of the strong Australian dollar and higher interest rates are posing formidable headwinds to growth while high interest rates are also dampening demand,” Ridout said.