Australia's manufacturing industry has clocked up the longest period of expansion in more than five years, thanks to the weaker Australian dollar.
The Australian Industry Group performance of manufacturing index remains above the 50 level separating expansion from contraction despite falling marginally in January, by 0.4 points, to 51.5.
It's the seventh consecutive month of growth, continuing the longest run of expansionary readings since 2010.
Ai Group chief executive Innes Willox said the manufacturing industry began the new year with positive momentum rolling over from the second half of 2015.
"The benefits of the lower dollar continue to accumulate with local manufacturers enjoying greater shares of the domestic market and increased export opportunities," he said.
Mr Willox flagged further growth in the coming months as new orders continue to strengthen.
This is despite declining mining orders and contraction in supply chains for automotive business, he said.
"The overall growth is clearly encouraging," he said.
"(But) there is still a considerable way to go before manufacturing is contributing fully to the much-needed diversification of the domestic economy."
Four of the eight manufacturing sub-sectors expanded - wood and paper, clothing and furniture, petrol, and food, beverages and tobacco.
Among the seven activity sub-indexes, new orders, exports and production remained firmly positive, while stocks rebounded after two months of contraction prior to the summer break.
But, the manufacturing employment sub-index returned to contraction, dropping 5.3 points to 47.1, after hitting a 12-month high in December.
Manufacturing selling prices spent a second month in expansion.
This suggests pressure on input prices from the falling currency is now partially being passed on, despite fierce competition.
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