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Australia’s factory output remained in expansionary territory in December despite new orders and exports easing.
The headline seasonally adjusted S&P Global Australia Manufacturing Purchasing Manager’s Index or PMI remained at 51.6 month on month, according to a Friday press release.
The reading showed modest improvement as it stayed above the threshold of 50, with growing new work inflows a key factor for the increase in production. However, new export orders slowed down amid stringent competition and weaker foreign demand.
“Although the rates of new order and output growth both slowed at the end of the fourth quarter, it was positive to see a higher level of business confidence and upticks in both hiring and purchasing activity, which reflected positive expectations for higher output in the coming year,” Jingyi Pan, S&P Global Market Intelligence’s economics associate director, said.
New beef tariffs from China are expected to weigh on imports from Australia, slowing down the global trade of its meat products. Before 2025 ended, China’s Commerce Ministry announced a 55% tariff on beef from its global trading partners, including Australia.
Moreover, cost pressures impacted producers, weakening the growth of supply conditions, S&P Global said.
Despite the easing of market conditions, S&P Global said business sentiment for the manufacturing sector remained upbeat in December, anticipating new products and expansion plans that may boost sales for the next 12 months.