Australia's manufacturing sector grew at a slower rate in the month of March, according to the data released today by the Australian Industry Group and PricewaterhouseCoopers. The performance of manufacturing index (PMI) dropped to 50.2 points in the month of March, decreasing by 3.6 index points.

The decline in the growth rate was mainly attributable to weak demand, a strong local currency and higher interest rates.

The Australian Industry Group-PricewaterhouseCoopers performance of manufacturing index fell to 50.2 points in the month of March. This means that the manufacturing activities grew in the month of March as the readings above 50.0 indicate expansion of activity in the measured sector.

The new orders sub index was reported to 50.9, decreasing by 5.1 points. The employment sub index fell to 47.1, showing that the employment activity contracted in the month of March. Production activity and inventories were also reported contracted in March.

The Australian Industry Group said that the industry is still showing some volatility and higher interest rates as impediments to growth.

"We don't want to call the manufacturing recovery a glass half empty, but we'd also be hesitant to call it half full," said Heather Ridout, chief executive of Australian Industry Group.