Australia’s manufacturing sector slipped back into contraction in October, marking the first deterioration in factory conditions this year, according to S&P Global Market Intelligence. October final Manufacturing PMI comes in at a poor 49.7:
- flash reading was 49.7
- 51.4 in September
Jingyi Pan, Economics Associate Director at S&P Global, said the October Manufacturing PMI showed weakening demand both at home and abroad, as softer market conditions and client destocking weighed on new orders.
- October’s Australia Manufacturing PMI indicated that conditions in the goods-producing sector deteriorated for the first time so far in 2025
- Demand for Australian manufactured goods worsened both domestically and abroad, dampened by subdued market conditions and destocking among clients.
The latest downturn follows what Pan described as a relatively shallow and brief reduction in manufacturing output mid-year. This time, however, the pullback was more pronounced, with firms cutting staff for the first time in eight months — a sign of increasing caution about the growth outlook. Optimism also weakened, reflected in a decline in the Future Output Index.
Pan added that manufacturers faced mounting margin pressures in October as cost inflation intensified while selling price growth eased, underscoring the squeeze from fierce competition entering the final quarter of the year.
