Australia manufacturing PMI holds 51.6 in December. Hiring accelerates & inflation firms.

Australia’s manufacturing sector continued to exhibit expansion in December, with a steady PMI at 51.6, indicating consistent growth. New orders and output sustained growth; however, momentum appears to be moderating due to softer foreign demand and increased competition. Employment showed significant growth, accelerating at the fastest pace in nine months due to improved candidate availability and rising workloads. Supply conditions, however, have notably worsened, leading to longer delivery times at the fastest rate since late 2024 and contributing to rising input costs driven by higher material and shipping prices. Encouragingly, business confidence reached a four-month high, buoyed by expansion plans and new product launches, though the overall growth outlook faces headwinds from current competitive pressures and demand fluctuations in the global market. Overall, despite the positive PMI reading, vigilance is advised as external factors could pose threats to further growth.