FX.co ★ Australia Industry Conditions Rebound

Australia’s Industry Index jumped to -3.5 in August from a revised -26.2 in July, its highest level since February and a clear sign of a sharp rebound in business conditions. The upswing was led by construction and business services, supported in particular by data centre projects. Activity and sales surged 31.2 points to -2.2, new orders climbed 15.9 points to -14.9, and employment rose 24.9 points to 3.0, with all three indicators at their strongest levels since the onset of the energy crisis.

Firms’ experiences were uneven: some reported new contracts and project wins, while others continued to struggle with softer sales and enquiries. Input volumes remained constrained by ongoing supply-chain disruptions, elevated costs, and geopolitical uncertainty.

Pricing trends diverged sharply. Input prices increased 10.8 points to 68.0, while sales prices dropped 13.1 points to 0.2, resulting in a record 67.8-point squeeze in margins. Average wages rose 16.9 points, reflecting annual pay adjustments at the start of the new financial year and highlighting persistent labour cost pressures despite the headline improvement in conditions.