The Australian Industry Index remained weak in May largely due to the energy crisis, with the index down 1 point to -26.5 in seasonally adjusted terms, according to a report released by the Australian Industry Group on Wednesday.
The energy crisis weighed heavily on new orders, declining 6.3 points to -34.6, with firms reporting delays in investments and looming uncertainty in the future path of energy markets.
Input prices remained high at 63.1, but showed slight easing in May with a 6.4 point decline, while weaker sales price growth at 18.3 indicated limited pricing power.
Additionally, wage growth increased by 6 points to 43.6, contributing to ongoing labor cost pressures.
Metals manufacturing increased in response to supply disruptions, while other sectors faced weak conditions.
Meanwhile, business services, which was previously less impacted by the energy crisis, experienced a downturn by 12 points in May, to be deeper in contraction at -33.3, its lowest result since February 2025.
The Australian PMI was in contraction at -22.4, while the Australian PCI continued to rebound momentum in May, rising 9 points to -9.9.