The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI) has consolidated its recent gains, falling 2.4 points to 51.0 in May to remain above the 50-point level separating expansion from contraction.

The result continues the longest unbroken period of growth for the Australian PMI since September 2006, now at 11 months. As in April, six of the seven activity sub-indexes expanded in May, although most eased from last month. The exception, once again, was the employment sub-index (down 3.4 points to 45.6).

Five of the eight manufacturing sub-sectors expanded (that is, above 50 points in three-month moving averages). Food, beverages & tobacco (down 8.8 points to 65.3) and wood & paper products (up 1.9 points to 67.7) remained in strong expansion, as did petroleum & chemicals (up 5.4 points to 59.9). Printing & recorded media (up 4.1 points to 49.7) and machinery & equipment (up 2.8 points to 50.6) both stabilised, while metal products (up 0.2 points to 44.1) and textiles, clothing & other manufacturing (down 3.9 points to 47.1) contracted in May.

The input prices sub-index increased by 5.9 points in May to 63.2, reversing the easing in input price pressures seen last month. Wages growth strengthened again, rising 3.9 points to 61.3. The manufacturing selling prices sub-index reversed its recent downward trend, climbing 5.5 points to stabilise at 50.6.

“Australian manufacturing is recovering in 2016 in response to the lower dollar, but it is also rebalancing in response to changes in global production and consumption trends,” said Ai Group Chief Executive, Innes Willox. “We are seeing an increasing focus on consumable goods such as food, groceries and health products as well as building materials for the construction industry. We are still seeing contraction, however, in the heavy industrials categories and especially in metals and some types of machinery and equipment manufacturing such as automotive production. On balance, the positives are outweighing the negatives at present.”