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Australia’s manufacturing sector has seen a marked improvement despite carrying the deadweight of Victoria’s coronavirus lockdown.

The Australian Industry Group’s manufacturing index increased by 9.6 points to 56.3 in October.

It is the first time since July the index has been above 50 points, indicating the sector is in expansion.

The surge was led by NSW, while respondents across all sectors noted a jump in sales and new orders as a result of pent up demand from initial coronavirus restrictions.

Ai Group chief executive Innes Willox said the lift in sales and strong growth in new orders were encouraging signs of improving household and business confidence.

“The solid national performance was achieved despite another month of contraction in Victoria,” Mr Willox said.

“With restrictions in Victoria being lifted there are very good prospects of further strength in the closing months of 2020.”

Such an improvement is unlikely to deter the Reserve Bank of Australia from a widely expected interest rate cut at Tuesday’s board meeting.

Economists are predicting the central bank to cut the cash rate to 0.1 per cent from the already record low of 0.25 per cent, while making the similar changes to other interest rate and funding levers.

The start of a new month will see a flurry of new economic reports, including CoreLogic’s home value index for October.

It will show how prices fared after Melbourne dragged down the national value of homes for a fifth straight month in September.

The monthly ANZ job advertisements series will also be published, a key pointer to future employment. Ads were still down 21 per cent from February in the September report.

Finally, the Australian Bureau of Statistics will release the latest lending and building approvals figures.