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Australian manufacturing contracts: report

Xinhua, July 1, 2015 Adjust font size:

Australia's manufacturing sector slumped in June after recording its first growth in six months in May.

The Australian Industry Group's manufacturing index (PMI) dropped 8.1 points to 44.2 in June, the lowest reading of the index since July 2013.

The index is now below 50 points, the level which separates expansion from contraction, local media reported.

Ai Group said manufacturing sales declined for a 13th straight month, an indicator of weakness in local demand.

"Respondents indicated that local demand remained weak in June, despite increased residential construction activity and very low interest rates," the group said in a statement.

The ongoing decline of the Australian automotive industry was a major factor.

"Subdued consumer and business confidence, further declines in mining and other business investment in machinery and equipment, and a slow economic outlook, also continue to weigh on local demand," the report stated.

But there was some positive news.

Exports expanded for a second month, mainly in the food and beverage sector, as the lower dollar continued to support export growth. Endi