A high Australian dollar and reduced mining activity have produced a further contraction in the manufacturing sector, an industry study finds.
The Australian Industry Group Australian performance of manufacturing index (PMI) fell 1.2 points to 44.1 in September - with readings below 50 showing contraction.
The report showed a concerning trend for weakness in new manufacturing orders - which fell for the seventh consecutive month, down 4.8 points to 44.3.
Only two sub-sectors showed an increase in activity for September - textiles clothing and footwear, and paper printing and publishing.
There was contraction in three sub-sectors which had shown expansion during August - food and beverages, wood products and furniture, and miscellaneous manufacturers.
Australian Industry Group chief executive Innes Willox said he expected the weak trend to continue.
"The softer conditions for manufacturers recorded in September looks like continuing in the months ahead with a sharper decline in the forward-looking new orders sub-index,â€