The level of Australian manufacturing activity slowed in March, dropping back after a slight increase in February, according to an industry survey that suggests producers are pinning their hopes on measures in the federal budget to spur consumer spending.
"Some respondents attributed this to a general slowing in the economy while others said their customers are delaying orders until after the federal election," the Ai Group said after releasing its Australian Performance of Manufacturing Index release on Monday.
The survey indicated demand for building-related materials continued to contract last month but manufacturers in the paper, packaging and printed goods sector noted higher than usual demand for this time of year - something that they attributed to forward orders for Easter.
"Metal product manufacturers and businesses in the machinery and equipment and building products sub-sectors fell deeper into the red as drought and the slump in the construction sector continued to flow through supply chains," Ai Group chief executive Innes Willox said.
The sector trend reading for building materials, which includes products such as glass, bricks, cement, tiles, timber and furniture, fell 2.5 points to 44.7 points in March - below the 50-point mark separating expansion and contraction in activity.
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"With new orders flat, manufacturers will be looking to tomorrow's budget for a boost in business and consumer confidence," Mr Willox said.
