Manufacturing activity has recorded its first positive result in eight months, helped by increased activity in the food, beverages and tobacco sub sector.
The Australian Industry Group's (Ai Group) Performance of Manufacturing Index (PMI) rose 1.7 points to 50.7 in July.
It was the first time since October the index was above 50, indicating an increase in activity.
Ai Group chief executive Innes Willox said the bounce in activity came despite manufacturing still facing a number of challenges.
"The high currency is maintaining intense pressure on exporters and import-competing businesses are facing weak demand and low prices for locally-made products," he said.
"Further, with wages and input costs continuing to edge higher, there were very few signs that manufacturers' margins are recovering sufficiently to attract much-needed investment into the sector."
Of the eight manufacturing sub-sectors only the large food and beverages and the smaller wood and paper products expanded in July.
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