The Australian Industry Group Australian Performance of Manufacturing Index fell 5.4 points to 52.0 in July and employment remained stable.
Readings above 50 signal an expansion in manufacturing activity. Which means the latest Australian PMI result indicates continuing but slower growth across the manufacturing sector and a record period of continued growth.
Ai Group chief executive Innes Willox said infrastructure projects continued to support demand for manufacturing products.
But but rising energy costs and growing wage pressures were constraining activity.
He said many businesses noted an increase in wage rates from July 1. That was the date when the Fair Work Commission’s 3.5 per cent minimum wage rise came into operation.
The report shows employment remaining stable in July after a year of growth. Which suggests employers in the sector may be wary of the increased costs of employment resulting from the Fair Work Commission’s decision.