Australia's manufacturing activity dropped sharply in July largely due to declines in manufacturing production and employment, data from Australian Industry Group-PricewaterhouseCoopers showed Wednesday.
The Performance of Manufacturing Index dipped 6.9 points to 40.3. A reading below 50 indicate a contraction in activity.
"Manufacturers are responding by reassessing and re-modelling their businesses but, as suggested by another drop in new orders and with the full impact of the carbon tax still to be felt, further falls in overall activity are likely in the months ahead," said Ai Group chief executive Innes Willox.
Cautious economic outlook, the carbon tax and the Australian dollar were cited as impacting activity and sector confidence in July. The new orders sub-index slipped 5.8 points to 40.4 and manufacturing production was down by 9.7 points to 37.8.
Despite another drop in selling prices to 42.1, the sector's wages rose to their highest level in a year in July.
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