06.10.202622:47:29UTC+00Australia Industry Activity Slumps

Australia’s Industry Index slumped to -24.2 in September from a revised -1.6 in August, highlighting escalating uncertainty as volatile prices and shifting market conditions weigh on investment, orders, and forward planning. Firms reported increasing difficulty in securing finance, while cost pressures remained elevated amid a second wave of fuel and downstream price increases that reignited inflation concerns.

The activity/sales index plunged 28.5 points to -31.0, returning to a state of deep contraction. Employment also slipped back into negative territory at -15.6, wiping out the gains seen in August. New orders dropped 22.4 points to -35.9, reversing earlier improvements, and input volumes weakened to -12.9.

Input price growth eased, with the index falling 10.6 points to 56.8, but sales prices rose 13.0 points to 13.6, indicating some improvement in firms’ ability to pass on costs. Even so, the spread between input and sales price indices remained wide at 43.2 points, keeping profit margins under pressure despite this partial relief.

Capacity utilisation slipped to 77.2%, even as businesses continued to grapple with rising costs, labour shortages, and intense competitive pressures.