Australia’s Industry Index edged down 1.0 point to -26.5 in May 2026, underscoring persistent industrial weakness amid an energy crisis and economic uncertainty. New orders plunged 6.3 points to -34.6, back to late-2024 lows, as firms cited delayed investment, thin pipelines, and cautious re-ordering. Input volumes fell 5.5 points, reflecting supply chain disruptions, transport bottlenecks, and high freight costs. Activity/sales stayed subdued at -32.6, while employment remained in contraction at -14.6 despite modest improvement, with uneven labor conditions marked by skill shortages and reduced hours. Cost pressures eased but remained heavy: input prices dropped 6.4 points to 63.1, sales prices slipped 2.4 points to 18.3, leaving margins strained. Meanwhile, wages rose 6.0 points to 43.6. Capacity utilisation eased to 75.7%, constrained by surging energy costs, raw material shortages, and regulatory hurdles, with weak investment and uncertainty expected to weigh further on conditions.