Ai Group Industry Index

The Ai Group Australian Industry Index is Ai Group's monthly business activity indicator for Australia's industrial ecosystem, covering manufacturing, construction and industry services only. It draws on a national monthly business survey open to any covered Australian business, with replies verified, de-identified and reported only in aggregate. Sector results use ANZSIC codes (Australia's industry classification) and gross value added weights (each sector's share of output value).

It measures breadth of monthly change, not output levels. It is no economy-wide gauge or official statistic, and it launched in January 2023 with back-history to 2017. The survey behind it runs since 1992, with seasonally adjusted data from January 2020 and trend data from July 2020.

Each release covers the preceding month and appears on the first working Wednesday of each month, or the next working day after a national holiday. Subscriber data stays under embargo until 7:30am AEST/AEDT, and the public report goes live at 9:00am AEST/AEDT. Each release includes the Australian PMI (all-manufacturing sub-index) and Australian PCI (construction sub-index), plus sector and activity breakdowns with executive highlights. All data is seasonally adjusted (smoothed for calendar effects) with no stated revision policy; above 0 means expansion and below 0 means contraction.

Moves come from sector results and activity sub-indexes, each published as its own index.

• Manufacturing and Construction (Australian PMI, Australian PCI): breadth of change across all manufacturing and building activity.
• Intermediate Industries (Chemicals, Minerals and Metals, Machinery and Equipment): chemicals, metals and equipment makers.
• Food and Business Services (Food, Beverages and TCF, Business Services): food, drink and clothing makers plus industry services.
• Demand and Jobs (New Orders, Employment, Activity/Sales): incoming demand, hiring and current activity.
• Costs and Prices (Input Volumes, Input Prices, Selling Prices, Wages): input buying, costs, prices charged and pay growth.
• Trade and Capacity (Exports, Capacity Utilisation): export demand outside construction and share of capacity in use.

In February 2023 the headline rebounded 9.8 points to -1.8, broadly stable after contraction in 10 of the prior 12 months. New Orders surged 24.5 points to 8.3 and Employment rose 3.4 points to 6.2, while Activity/Sales stayed in contraction at -14.5, up only 5.7. Input Prices jumped 21.1 points to 61.2 and Wages rose 7.2 points to 40.9, but Selling Prices fell 8.7 points to 11.1, a margin squeeze.

Minerals and Metals rose 20.9 points to 6.1 and Business Services rose 25.2 points to 1.7. Food, Beverages and TCF fell 28.5 points to -12.6 and Construction fell 16.4 points to -5.0. Capacity Utilisation eased 1.9 points to 82.1%, still above its long-run average of 78.3%.

1. Collect: collect monthly survey replies from businesses in covered ANZSIC sectors, verified and reported only in aggregate.
2. Diffusion: form a diffusion index (a breadth gauge of expansion versus contraction reports) from -100 to 100 for each sector and question. For example, 45% expansion less 25% contraction with 30% unchanged gives 20, while 15% against 55% gives -40.
3. Weight: weight sector results by each sector's share of value added using official gross value added data, then aggregate to the headline.
4. Adjust: seasonally adjust each series by official methodology and compute trend estimates with the Henderson-13 technique (a smoothing method).
5. Read: read the result against 0: below 0 means contraction, above 0 means expansion, and distance from 0 shows breadth.