RTTNews - Australia's Purchasing Managers' Index or PMI rose 7.4 points to 37.5, to reach its highest level in the last seven months, the latest survey from the Australian Industry Group and Pricewaterhouse Coopers said Monday. In April, the index had reached a record low of 30.1.

A reading above 50 indicates expansion, while a reading below 50 signals a contraction.

During the month, the production index moved up to 41.4 from 28.8, while the new orders index increased to 39.4 from 26.7. However, capacity utilization decreased slightly to 66.9% from 67.5%. Exports declined for the ninth consecutive month, and stood at 40.3 in May compared to 39.2 in the preceding month.

At the same time, the employment index remained in contraction for the 17th consecutive month, but moved up to 35.7 from 32.9. The average wages index showed an expansion, increasing to 52.5 from 48.3. Suppliers' deliveries were down for the 10th consecutive month, but with the index rising to 33.4 from 30.3. Inventories were below the 50-mark for the eighth consecutive month, falling to 31.1 from 37.7

Input prices were stable in May, with the index dropping to 50.2 from 55.7. Moreover, selling prices declined to a record low of 41.6 from 42.9 in April.

Commenting on the latest PMI data, the AiG's Chief Executive Heather Ridout said, The lift in the Australian PMI in May brings it into much closer alignment with the direction and strength of global PMI's. The slowing of falls in new orders and production across the sector in this month's data may indicate that stimulatory fiscal and monetary policy is having a stabilizing effect.

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