Ai Group has once again highlighted the latest developments within Australia’s economy through its Australian Industry Index®, which provides an overview of the manufacturing, construction, engineering, technology, and business services sectors—industries that together represent 36% of the nation’s economy.
The Australian Industry Index® is published on the first working Wednesday of every month (or the following working day in the event of a national holiday) and serves as an essential resource for monitoring economic activity. As part of its continued evolution, Ai Group has integrated its former sub-indicators, the Australian PMI® and Australia PCI®, into the Australian Industry Index®, eliminating separate release dates for these indexes.
January 2025 Update: Demand Conditions Begin to Improve
The January 2025 update revealed a slow but positive shift in economic conditions, with the Ai Group Australian Industry Index® reaching its highest level in twelve months. The index, which improved by 1.4 points to -17.4 (seasonally adjusted), indicates that while the Australian economy remains in contraction, demand conditions have shown signs of recovery.
Key findings from the report include:
New Orders and Activity/Sales Indicators: Both indicators experienced slight increases, signaling that demand has improved but remains subdued.
Pricing Pressures: Inflationary pressures persist across the industrial sectors, with all pricing indicators trending upward.
Industry-Specific Performance: The chemicals and food industries had stronger performances during the holiday period, while machinery and metals sectors saw a seasonal slowdown.
Labor Shortages and Economic Uncertainty: Many industries cited challenges such as a shortage of skilled labor, increased living costs, and overall economic uncertainty affecting their operations.
Economic Intelligence: Key Insights for February 2025
In the February edition of the Economic Intelligence newsletter, Ai Group delves into a range of critical economic topics:
Australia’s Productivity Performance: Ai Group’s research addresses the ongoing post-pandemic productivity challenges, outlining varying levels of productivity across industries and discussing potential reforms tailored to the specific needs of each sector.
Tracking Australian Industry: While GDP growth has slowed and inflation pressures remain, the report forecasts a sluggish investment climate for 2024-25, with government-supported job creation and moderate wage growth offering some respite for businesses.
Q&A with AustralianSuper: AustralianSuper’s investment team reflects on 2024, offering insights into the economy and discussing asset research within the Australian Super portfolio.
Economic Forecasts: The Treasury predicts economic growth will pick up in 2025, with stable inflation and declining wage growth expected through 2026.
Ai Group members can access detailed reports and time-series data related to the Australian Industry Index® via email. Non-members can subscribe annually or purchase one-off reports to stay informed on key industry trends.
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