Australia’s manufacturing sector shows continued growth in 2018, with a major increase in January. According to Ai Group’s Performance of Manufacturing Index (PMI), It is currently at 58.7 points – up by 2.5 points from previous reported levels.
This increase coincides with the announcement of the federal government’s plans to spend $3.8 billion for the export of manufactured weapons. The plan could contribute to the continued growth of Australia’s manufacturing industry, and boost the demand for products such as press tool equipment.
Rapid Index Growth
A PMI of 50 and above indicates growth – January’s score bodes well for the manufacturing industry, which can expect noticeable growth over the following few months. January’s figures also marks a 16-month streak of steady or increased activity levels across the industry.
There is also an increase of new orders, which will especially be of help to the industry. For instance, manufacturing companies can expect a higher demand from the defence sector in the future, following the government’s announcement of a spending package for the development and manufacturing of military weapons.
Australia’s decision to invest $3.8 billion on weapons exports stems from its push to be among the top 10 global exporters of manufactured weapons.
The U.S. is world’s current biggest distributor of military weapons, followed by Russia, China, France, Germany, the U.K., Spain, Italy and Ukraine. Australia intends to focus on these countries to achieve its goal, according to Defence Industry Minister Christopher Pyne.
The expansion of manufacturing in Australia brings new business to enterprises that rely on the industry, aside from indicating economic growth. The country’s massive investment on exporting weapons could be a major catalyst in the coming years.