Manufacturing activity falls in Dec

Australian manufacturing activity fell for the 10th consecutive month in December amid continued weakness in the global economy, a private survey shows.

The Australian Industry (Ai) Group performance of manufacturing index (PMI) was unchanged at 44.3 in December, but stayed below 50, which indicates a contraction in activity.

The falls in activity were largest in the non-metallic minerals products sub-sector, wood and paper products, as well as the textiles sub-sector.

Australian Industry Group (Ai Group) chief executive Innes Willox said weak global demand and the softening Australian economy are continuing to weigh on the manufacturing sector.

"The pressures are widespread across the industry and in December no manufacturing sub-sector recorded an expansion in activity," he said in a statement accompanying the survey's release.

"Forward orders continue to track weakly suggesting demand has not yet turned the corner."

The Reserve Bank of Australia has cut its interest rate by 1.75 per cent since November 2011.

The most recent cut was in December, by a quarter of a percentage point to three per cent.

"The recent rate cuts by the Reserve Bank are yet to offset the range of factors adversely impacting the industry and further reductions are likely to be needed over the next few months," Mr Willox said.

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