SYDNEY, Aug 1 (Reuters) - Australian manufacturing activity continued to expand in July, albeit at a slightly slower pace than the month before, while firms remained upbeat on the year ahead, a survey showed on Tuesday.
The Commonwealth Bank and IHS Markit Purchasing Managers' Index (PMI) dipped to a seasonally adjusted 54.4 in July, from 56.2 in June, although that remained comfortably above the 50.0 threshold between expansion and contraction.
The measure of output pulled back a bit in July but again remained positive at 55.0, while the index of employment edged down to 52.0.
New orders stood at a healthy 56.0, while the measure of export orders ticked up to 55.2.
"While the September quarter has kicked off at a slightly slower pace than seen in the June quarter, the manufacturing sector remains comfortably in expansion territory," said CBA chief economist Michael Blythe.
"The lift in new export orders is an encouraging sign that Australia is benefiting from the global recovery now underway."
Manufacturers were also confident on the outlook, with around two-thirds forecasting higher output over the next year.
There were hints of a pick up in inflationary pressures in the survey as respondents reported higher raw material prices, including for foodstuffs, electricity and fuel.
"While inflation pressures in Australia remain very tame, the lift in input prices and reports from panellists about higher raw material prices and energy prices point to some stirring at the front end of the pricing chain," said Blythe.
Official data out last week showed consumer price inflation slowed to 1.9 percent in the year to June, below the Reserve Bank of Australia's (RBA) target band of 2 to 3 percent.