The manufacturing industry is growing at its strongest pace in nearly six years thanks to a weaker Australian dollar.
The Australian Industry Group's performance of manufacturing index lifted two points to 53.5 in February, its highest point since July 2010.
The 50-point level separates expansion from contraction.
The result was the eighth consecutive month of growth, marking the longest streak in a decade.
Ai Group chief executive Innes Willox said production, sales, new orders and exports all showed a credible lift, consolidating gains made over the second half of 2015.
"There is little doubt that greater competitiveness in export markets and in the domestic market due to the lower dollar is central to this turnaround," he said.
And, with the Aussie dollar set to remain around its current level, confidence is building, Mr Willox said.
"Businesses are re-adjusting their strategies, giving a higher priority to domestic activities both internally and along their supply chains," he said.
CMC Markets chief market analyst Ric Spooner said the result reinforces a pattern where manufacturing in countries with relatively weak currencies like Europe and Australia are doing well.
"That's at the expense of those with stronger currencies like the US and China," he said.
In addition, low commodity prices - particularly for oil - are keeping down input costs and also providing a boost to the sector, CommSec economist Savanth Sebastian said.
But Mr Willox said big challenges remain as the sector is vulnerable to international turbulence and poor domestic policy changes.
Despite improving trends, the metal products and large machinery and equipment sub-sectors remain in contraction, Mr Willox said.
He said supply chains were also taking time to rebuild after the "hollowing out" that defined the extended period of weakness for the sector in recent years.
"The upcoming federal budget is an opportunity to add momentum to the recovery that is underway," he said.
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