CANBERRA, AAP – Australia’s manufacturing industry rebounded during in November after several months of flat results due to the restrictions imposed battling the Delta variant of the coronavirus.

The Australian Industry Group performance of manufacturing index rose by 4.4 points in November to 54.8, and firmly above the 50 point mark that separates expansion in the industry from contraction.

“With restrictions easing, performance improved across the manufacturing sectors,” Ai Group chief executive Innes Willox said on Wednesday.

However, with manufacturers operating at relatively high capacity, they continue to voice concerns about reliability of supply inputs and the difficulty in filling new positions due to worsening skill shortages and localised labour shortages.

“While input prices remain high and wages growth has firmed, market conditions are supporting some recovery of higher costs in market pricing of manufactured goods,” Mr Willox said.

Meanwhile, as Australia’s governments and medical experts ponder the possible impact of the new Omicron COVID-19 strain, new figures will show the overall economic damage caused by the response to the Delta variant.

The Australian Bureau of Statistics will release the national accounts for the September quarter on Wednesday.

Economists’ forecasts point to an economic contraction of around 2.5 per cent in the quarter.

If correct, it would be the second-largest decline in the history of the national accounts going back to 1959, the biggest being the seven per cent quarterly slump in the June quarter 2020.

Still, it would still leave annual growth at 3.2 per cent and above the long-term trend at around 2.8 per cent.

The decline will be led by a large drop in consumer spending due to the lockdowns in NSW, Victoria and the ACT.

Consumer spending makes up more than half of the gross domestic product equation.

Figures over the past week also showed a decline in business investment and inventories over the September quarter and a small fall in construction work, but exports will make a positive contribution, as will government spending.

More up-to-date data has shown the economy making a marked turnaround in the early stages of the December quarter with retail spending and employment rebounding.

However, economists warn the Omicron variant has the potential to dent the recovery across Australian and the global economies.

Global ratings agency Standard & Poor’s says in an outlook for the Asia-Pacific the arrival of new variants such as Omicron add to the complexity of managing the virus in the region.

“We are still in the throes of a global pandemic and new variants continue to pose risks to economic recoveries,” it says.

“Just as the Asia-Pacific was learning to live with the virus, the new Omicron variant is already disrupting economic reopening.”