"(Year) 2019 closed on a disappointing note for Australian manufacturing with production and employment both weaker in December," Australian Industry Group Chief Executive Innes Willox said.
Prompting calls for more economic stimulus, Willox suggested that more needs to be done in order to kickstart growth.
"The downturn in manufacturing recorded in November and December is a clear warning of the growing risk of a more broad-based slackening of an economy already in the slow lane," he said.
"It adds weight to the view that serious consideration should be given to further fiscal stimulus."
With a score above 50 points indicating that manufacturing activity is expanding, Australia's Performance of Manufacturing Index for the month of December showed activity had declined to 48.3.
"Producers linked to construction and housing suffered from the entrenched slump in these areas of activity with drought and adverse weather also taking their toll," said Willox.
Although the Reserve Bank of Australia's has already cut the nation's cash rate to 0.75 percent, its widely anticipated that figure will fall even further to 0.50 percent in February.
Despite this, Australia's manufacturing slump is predicted to continue well into 2020.
Latest comments