The Australian PMI® for August 2018 stands at 56.7, up from 52 in July. It has now recorded 23 consecutive months of stable or positive readings, the longest stretch since 2005.

The gains are still broadly based, driven by food processing, construction materials and machinery and equipment. The drought is reflected in higher input prices for some in the food industry and lower orders for those who make equipment for the agricultural sector. The peaking of residential construction is starting to be reflected in feedback from suppliers into housing.

Wages growth is stirring, reflecting the strong skills shortages reported in other surveys of manufacturers. There is competition for skilled labour from the booming infrastructure sector, and in mining where demand is recovering with job vacancies in the sector 37% higher than a year ago.

High energy prices and uncertainty around energy policy are continuing to stress investment in energy intensive sectors.

The full August report is here.