Australia's manufacturing sector has declined for the ninth consecutive month, with the pace of contraction accelerating.
The Australian Industry Group's Performance of Manufacturing Index fell 1.6 points to 43.6, well below the 50-point level that separates expansion from contraction.
In a particularly worrying sign, the level of new orders was also down for a ninth straight month, indicating that demand is showing no signs of picking up in the short-term.
The Ai Group's chief executive Innes Willox says production, employment and exports have also declined over the past eight months.
"Over the same period wages and non-wage costs have risen while there has been downward pressure on selling prices," he observed in the report.
"With the new orders sub-index down once again in November, the pressures on the industry look set to continue." The only manufacturing sector to expand in November was food and beverages, which recorded very modest growth.
Innes Willox says interest rate reductions so far have not been large enough to stimulate the building sector, which underpins a lot of demand for manufactured products.
He says this, combined with other headwinds, is making it extremely difficult for manufacturers to remain profitable.
"The key concerns for manufacturers remain the high dollar, rising energy costs and weak demand in export and local markets,"Â he said.
"These factors are exacerbated by the ongoing slump in the residential and commercial construction sectors and have not been offset by the reduction in interest rates to date." The Australian Industry Group is calling for another interest rate cut when the Reserve Bank board meets tomorrow, and the majority of economists now believe manufacturers will get their wish.