Ai Group Manufacturing Index

The Ai Group Manufacturing Index, officially the Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®), measures breadth of monthly change in manufacturing. Ai Group has published it monthly since 1992 from a rotating national sample of about 200 manufacturers across all states and sub-sectors. Each firm reports by main activity under 6 ANZSIC 2006 groups covering food, machinery, metals, chemicals, building materials and textiles.

As a diffusion index, a gauge of how widespread rises or falls are, it tracks shares of expanding firms rather than total output value. It differs from another publisher's manufacturing PMI and is not an ABS publication, since ABS data only set weights and report-card context.

The classic PMI appeared on the first working day of each month at 08:30. There was no January release, with December and January together in early February. Since February 8, 2023 the PMI has been a sub-indicator of the Ai Group Australian Industry Index with no separate date. That index runs from -100 to 100, with 0 neutral and distance from 0 showing strength.

That index appears on the first working Wednesday monthly, or the next working day after a national holiday, under embargo at 07:30 for 09:00 publication. Readings compare activity with the previous month, and each release gives key findings with seasonally adjusted figures. Tables cover components, sales, exports, prices, wages and capacity utilisation, plus state and sector indexes with Australian Bureau of Statistics context.

The PMI headline moves with its 5 diffusion components around a 50-point no-change line, and distance from 50 shows strength.

• Production: output change versus the prior month.
• New orders: incoming demand, a forward guide to future activity.
• Supplier deliveries: flow and availability of ordered inputs.
• Inventories: change in finished stock holdings.
• Employment: change in manufacturing headcount.

In September 2020, in the release dated October 1, 2020, the headline fell 2.6 points to 46.7 as Victorian restrictions slowed orders and new enquiries. Production held broadly stable at 50.1 while employment fell to 47.7, new orders to 45.1 and supplier deliveries to 42.8.

The national figure hid sharp gaps, with Victoria at 37.6, New South Wales at 44.3 and Queensland at 43.3. South Australia instead rose to 67.4 on agriculture-linked clients. Ai Group linked the fall to the Melbourne lockdown and saw a tentative recovery prone to setbacks.

1. Business replies: Each firm says whether activity for each question rose, fell or stayed flat versus the prior month.
2. Diffusion indexes: Each of the 5 activity series becomes a diffusion index showing breadth of rises versus falls.
3. Weighted composite: The headline blends the 5 indexes with varying undisclosed weights that sum to 1. For illustration only, equal-weighting September 2020 inputs 50.1, 47.7, 45.1, 42.8 and 47.3 gives 46.6, near the published 46.7, and the closeness is coincidental.
4. Sector weights: Sub-sector weights come from Australian Bureau of Statistics output data by industry classification.
5. Seasonal adjustment and trend: Data are seasonally adjusted and trended by Bureau methods, while sector indexes use a Henderson 13-month filter.