Australian manufacturers have been experiencing growth over the past two months but analysts said the jumps were too minimal and barely out of the contraction level.
According to the latest Australian Industry Group-PricewaterhouseCoopers Australian Performance of Manufacturing Index issued on Wednesday, factories production inched up by 1.4 points to 51.6 points in January.
The December level as was pegged at 50.2 points, which analysts noted barely pushed up the manufacturing sector out of the woods in the month.
While production growth marked the past two months, local manufacturers admitted that competition coming from abroad has been creating pressures, plus the threat of a possible downturn lingers around.
The January PMI showed that the food and beverage industries registered gains in the period, with the transport equipment manufacturing also ramping up its production activities.
At the same time, overall inventories and input deliveries surged in the past month, the new production gauge said.
On the other hand, up to six manufacturing sub-sectors have reported of decreasing outputs in the month, with sub-sectors of the construction industry suffering declines within the same period.
Australia's textile production ended up as the biggest loser in January, the index showed.
While gloom was not entirely erased, PricewaterhouseCoopers partner Jeremy Thorpe told The Australian that the manufacturing sector as a whole actually pulled up from the pit it fell into im 2011.
He admitted, however, that "the long-term outlook for Australian manufacturers is unpredictable and this is placing further pressure on businesses."
Considering that, "it is critical that businesses continue to analyse their business models, look for improvements and make changes where they see gaps." Mr Thorpe asserted.
Also, Australian Industry Group (AIG) Chief Executive Heather Ridout agreed that the January PMI signalled good numbers but warned too that the improvements were almost negligible.
"Respondents cited ongoing global economic uncertainty and strong overseas competition as factors inhibiting growth in January," Ms Ridout said.
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