The falling Australian dollar is giving the manufacturing sector a boost, with activity rising for a third straight month.
The Australian Industry Group's Performance of Manufacturing Index (PMI) rose 0.4 points to 52.1 in September, indicating activity in the sector is increasing at a faster pace.
A weaker Australian dollar rate was helping to make locally produced goods more competitive with imports, Ai Group chief executive Innes Willox said.
"In encouraging news for an economy searching for sources of growth outside mining, September saw the manufacturing sector consolidate on gains generated in recent months," he said.
"The lower Australian dollar is a clear driver with local producers winning against imports in the domestic market and making further progress in export markets."
The Australian dollar has fallen 14 US cents since the beginning of the year, and is nine per cent weaker against a basket of currencies representing its major trading partners.
The two weakest manufacturing sub-sectors in September were metals and machinery.
Mr Willox said the metals category was being buffeted by falling demand from overseas, and machinery and equipment was being hurt by the wind down of the car manufacturing industry in Australia.
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