The latest Westpac-Australian Chamber of Commerce and Industry (ACCI) survey of industrial trends showed local manufacturing activity declined in the three months to September as global concerns and election uncertainty at home outweighed a generally favourable economic background.

The survey's main composite index of activity dropped 7.1 points to 49.5 for the third quarter, the weakest level in a year and below the 54.8 expected in the June quarter survey.

After showing signs of above trend growth in the first half of the year, the index, at near 50, suggests a delay in manufacturing expansion.

''We were surprised by the degree of deceleration ... the second half of the year is going to be basically flat in the manufacturing sector,'' according to Westpac senior economic Huw McKay.

"Activity outcomes fell well below prior predictions amid elevated concerns over the global outlook."

Mr McKay said Election uncertainty also influenced the September quarter outcome, as 80 per cent of responses to the survey were taken after polling day.

But while manufacturing had tracked sideways, business sentiment remained resilient.

The measure of general business confidence shed two points but at plus 11, remained well above the decade average of minus three.

The expected composite index also dropped 4.6 points to 50.2.

Expectations had calmed across the survey, including those for selling prices, implying little threat to the inflation outlook, according to Greg Evans, the chamber's director of economics and industry policy.

He said there would be no need in the short to medium term for any intervention by the Reserve Bank of Australia.