manufacturing slow

Manufacturing off to slow start for year
Australia's manufacturing sector looks to have limped into the new year with new industry measures barely registering growth for January.

The Australian Industry Group's (AiG) Performance of Manufacturing Index has dropped more than three-points in the month to 50.2, that is just above the 50-level that indicates growth.

But it is the first time there have been two consecutive readings above 50 since the June quarter of last year.

The AiG says the challenge will be to consolidate on the growth of the latest two months in the face of unrelenting competition, both domestically and abroad.

AiG chief executive Heather Ridout says it is a positive outcome.

"Manufacturing activity has grown although for two months in a row, which is good news," she said.

"Clearly, it's too early to call it a trend and we need to view it in the context of widespread restructuring that's occurring in the industry."

Ms Ridout says local manufacturers would be relieved that the US Federal Reserve this morning, signalled it was closer to ending its current campaign of interest rate increases.

Ms Ridout says it is the first time there has been two months of growth in a row since the June quarter of last year.

"It's minimal and and it's concentrated in sectors such as chemicals and machinery and equipment and it's not widespread and it's certainly not in every state - South Australia and Victoria still quite soft, Queensland and Western Australia going gangbusters," she said.

"It's still too early to call whether we've got a trend of growth in the industry.

"But it's a positive start to the year and it's certainly better than all the negative readings we had towards the end of last year."