Manufacturing sector contracted in January
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SYDNEY, Feb 1 AAP - Australia's manufacturing sector contracted for the 11th straight month in January, marking a weak start to 2013 for the industry.
The Australian Industry Group (Ai Group)performance of manufacturing index (PMI) dropped 4.1 points to 40.2 in January.
An index level of below 50 indicates a contraction in activity.
The sector has been shrinking since February 2012, according to Ai Group figures.
Ai Group chief executive Innes Willox said slowing domestic economic growth had added to the sector's woes.
"The well-entrenched pressures that have been confronting the manufacturing sector for several years are being compounded by a slowing in the broader economy," he said.
Mr Willox said a string of Reserve Bank of Australia (RBA) interest rate cuts had yet to provide a boost for manufacturing.
"Successive interest rate reductions have not yet turned conditions around," he said.
"The rate cuts to date have not offset the combined impacts of the substantial contraction in fiscal policy along with the structural challenges due to more intense international competition, the high dollar, ongoing increases in energy costs and increasingly uncompetitive unit labour costs."
The RBA cut the cash rate 1.75 percentage points between November 2011 and December 2012, bringing it to its current level of 3.0 per cent.
According to the Ai Group figures, new orders fell 6.3 points to 39.4 points in January, while eight of the nine sub-sectors recorded a decline in activity during the month.
The only sub-sector to record an expansion was wood and paper products, which recorded an index level of 63.7.