The Australian Industry Group/PriceWaterhouseCoopers performance of manufacturing index (PMI) climbed 5.1 points in October to 47.4, but remained just below the 50 level that marks the threshold between contraction and expansion.

The survey of over 200 companies showed softness in the clothing and footwear and paper, printing and publishing sub-sectors. The textiles; basic metals; transport equipment and miscellaneous manufactures sub-sectors recorded the strongest expansions, in part thanks to stronger demand from mining.

Manufacturing accounts for around 10 percent of the economy but is being rapidly overtaken by a booming mining sector.

Encouragingly for the jobs outlook, the survey's measure of employment jumped 5.9 points to 51.6, the first reading above 50 in 12 months.

Increases in employment were recorded in the textiles; chemicals, petroleum and coal products; basic metals; transport equipment; machinery and equipment; and miscellaneous manufactures sub-sectors.

The survey's measure of output rose 6.7 points to 45.9 in October, while the index of new orders firmed 2.3 points to 46.9. The index of inventories rose 4.7 points to 47.0 while that for exports climbed 9.9 points to 47.0.

News on inflation was mixed with the index of input prices rising 4 points to 68.1, while that for selling prices stayed in contractionary territory at 47.8.