Australian manufacturing activity picked up speed in July as new orders and output expanded strongly.
A survey by the Australian Industry Group and PricewaterhouseCoopers showed the PMI rose 1.5 points to 54.4 in July, moving further above the 50 level that marks the threshold between contraction and expansion.
The recovery in manufacturing continued in July, despite the waning impact of fiscal stimulus and above-normal business interest rates. Private sector demand is slowly re-emerging as a source of growth. But the survey of 200 companies showed employment turned lower after three months of growth.
Meanwhile, there was little sign of inflation in the survey. With inflation back in the central bank's target band of two to three percent, the Reserve Bank of Australia is widely expected to keep interest rates on hold at 4.5 percent at its monthly policy meeting on Tuesday.