The overall health of the Australian factory activity deteriorated in September, with the Judo Bank Australia Manufacturing Purchasing Manager’s Index (PMI) decreasing from last month's 48.5 to 46.7, according to a report by S&P Global released on Tuesday.

The report indicated that a decline in manufacturing new sales was "central to the deepening of the manufacturing sector downturn." Incoming new orders for Australia's manufactured goods dropped "at the fastest pace recorded outside of the pandemic period."

"Both output and new orders have fallen well below the neutral 50 index reading. With the sector recording its eighth month in contraction, businesses have been gradually easing headcounts, with the manufacturing employment index averaging 47.9 over the past four months," Matthew De Pasquale, Economist at Judo Bank said.