The Australian Industry Index rose 22.7 points in August to negative 3.5 in seasonally adjusted terms after a period of highly volatile conditions since the energy crisis began, according to a report released by the Australian Industry Group on Wednesday.

The activity, employment, new orders, and input indicators showed improvement, driven by enhanced conditions in construction and business services, particularly related to data center projects, the report said.

The activity/sales indicator climbed by 31.2 points to negative 2.2, to be marginally contractionary in August, while the employment indicator improved by 24.9 points, the first month it has been positive since February.

The contraction in new orders improved by 15.9 points to negative 14.9, up from negative 30.8 in July. Input volumes rose by 8.8 points, stabilizing at 1.

Input prices increased 10.8 points to 68, while sales prices decreased 13.1 points to be broadly neutral at 0.2 in August, recording the widest gap in the history of the series and indicating limited cost pass-on and growing inflationary pressures on industrial margins.

The Australian PMI (manufacturing) declined 5.7 points to negative 19.6, while the Australian PCI (construction) fell a further 7.3 points to negative 40.6, per the report.