Australia’s Industry Index slipped a further 1.0 point to -26.5 in May 2026, highlighting persistent industrial weakness amid an ongoing energy crisis and heightened economic uncertainty.
New orders fell sharply, dropping 6.3 points to -34.6 and returning to levels last seen in late 2024. Firms reported delayed investment decisions, thin order pipelines, and more cautious re-ordering from customers. Input volumes also declined, down 5.5 points, as businesses grappled with supply chain disruptions, transport bottlenecks, and elevated freight costs.
Activity and sales remained deeply subdued at -32.6. Employment conditions, while slightly improved, stayed in contraction at -14.6, with firms facing an uneven labour market characterised by skill shortages alongside reduced hours for existing staff.
Cost pressures eased but remained significant. Input prices fell 6.4 points to 63.1, and sales prices slipped 2.4 points to 18.3, keeping profit margins under strain. At the same time, wage pressures intensified, with the wages measure rising 6.0 points to 43.6.
Capacity utilisation edged down to 75.7%, constrained by surging energy costs, shortages of raw materials, and ongoing regulatory hurdles. Weak investment and continued uncertainty are expected to place further downward pressure on industrial conditions in the months ahead.