The slide in manufacturing activity has eased slightly, but the weaker Australian dollar is not making the impact that many had hoped.
The Australian Industry Group's Performance of Manufacturing Index rose 2.9 points to 49.4 in October.
The reading below 50, indicates a fall in manufacturing activity.
Ai Group chief executive Innes Willox said most of the survey's respondents believe the Australian dollar is still too high, while competition between imported good and locally made products remains intense.
The Australian dollar has fallen from 95 US cents in July to as low as 86.4 cents in October.
"Conditions remain patchy within the manufacturing sector with considerable differences between sub-sectors and with production and new orders lifting, whereas employment fell further during the month," Mr Willox said.
"More generally, businesses remain cautious and hesitant about undertaking the investments needed to underwrite future productivity and employment growth."
Of the eight manufacturing sub-sectors, only the large food and beverages and the smaller wood and paper products sub-sectors expanded in the month.
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