By Jacob Greber
Sept. 1 (Bloomberg) -- Australian manufacturing grew in August for the first time in 14 months as companies reported an increase in orders and rebuilt inventories.
The performance of manufacturing index rose 7.2 points from July to 51.7, the highest level since March 2008, the Australian Industry Group and PricewaterhouseCoopers said in a survey released in Canberra today. A reading above 50 signals manufacturing is expanding.
Today’s report supports central bank Governor Glenn Stevens’ view that the economy is rebounding faster than the the bank forecast at the start of the year as consumer and business confidence jumps. Stevens will keep the benchmark lending rate at a 49 year-low of 3 percent at 2:30 p.m. in Sydney today, all 17 analysts surveyed by Bloomberg News said.
“Manufacturing activity has been improving month by month,” said Heather Ridout, chief executive officer of the Australian Industry Group. Still, “conditions are uneven and pressures remain on employment.”
“There is a risk, particularly if interest rates are raised too early in the recovery phase, that as the effect of stimulus measures wane, the nascent recovery will fail to get traction,” Ridout added.
The manufacturing survey, which is similar to the U.S. ISM index, asked more than 200 companies about production, new orders, deliveries, inventories and employment.
To contact the reporter for this story: Jacob Greber in Sydney at jgreber@bloomberg.net
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