AIG Australia Manufacturing Index

The Australian Industry Group (AIG) Manufacturing Index measures the state of the national manufacturing sector. This index is based on a monthly survey of Australian manufacturing companies, which represent all industries, such as food and light industry, paper production, oil and chemical production, metalworking, mechanical engineering, etc.

This is a diffuse index, which is calculated as a weighted set of key indicators. These include subindexes related to production activity (sales, output, new orders, employment, deliveries from suppliers, inventory, exports), and price related subindexes (input and selling prices, as well as employee wages).

The survey participants estimate relative variables for their business: whether the value has increased, decreased or has not changed during the reported month. Each of the values is given a certain weight, based on which the final index is calculated.

The index value above 50 indicates the industry growth, and below 50 is an indication of slowdown. The distance from 50 characterizes the speed and strength of changes in the industry.

The industrial sector makes a significant contribution to the country's GDP and its activity characterizes the economy development state, that is why analysts closely follow this index. It is considered to be a strong indicator of the economy state. The index growth can have a positive effect on the Australian dollar quotes.