Australia's manufacturing sector again suffered a retreat in April, posting activity declines of 5.6 points to 43.9 in the month and underlining two months of successive contractions in an industry already reeling from the so-called downside of the country's resource boom.

The latest Australian Industry Group/PriceWaterhouseCoopers Australian Performance of Manufacturing Index (PMI) showed that as productivity dropped last month dropped so was the level of employment in the struggling sector, which workers' numbers dipped by 5.2 points to 46.1.

New orders were relatively lower in the month, the new index showed, which decreased by 6.2 points to 42.0 while inventories were depleted by 6.0 points to 46.4.

Subsequently, supplier deliveries dwindled by 3.9 points to 43.1, the April PMI showed.

Also, manufacturing firms were more hard pressed to generate considerable profits by the end of the month as selling prices were pared down by 1.6 points to 44.3 while input prices inched by a whole point at 60.9 points, the private survey showed.

The index covered about 200 firms or roughly 10 percent of the entire Australian economy, which presently relishes on the boom that was being driven by ongoing and incoming resources projects in the country.

Yet as direct result of the hyper mining activities, Australia has been witnessing a local currency that has come close in parity to the U.S. dollar, rendering the local manufacturing players quite vulnerable to their overseas counterparts.

Most affected sub-sectors were basic metals; textiles; wood products and furniture; clothing and footwear; and miscellaneous manufactures sub-sectors, the survey said.

Some good news though were carried by construction materials and paper, printing & publishing, which all disclosed some form of increased activities last month.

The latest PMI, according to Australian Industry Group (Ai Group) chief executive Innes Willox, reflected the sector's alarming contractions that started in March, which ended the relative growth that the industry had recorded from December last year through February this year.

"Manufacturers continue to be adversely affected by the strong dollar, comparatively high unit labour costs and rising energy prices," Mr Willox was quoted by the Australian Associated Press (AAP) as saying in the report.

"While it is a reading of only one month, the steep fall in manufacturing activity in April rings true and is of serious concern," the Ai Group chief noted.

The latest PMI, he added, should convince the country's policy managers to finally implement a sizeable cut on the present cash rate level, a move that he stressed would deliver benefits not only to the manufacturing but also to other ailing sectors in Australia.

Chief among them is the retail industry, which had been pressing on the Reserve Bank of Australia (RBA) board to bring down the country's borrowing cost to boost further consumer confidence.

"Production, employment and new orders all fell sharply in April pointing again to the importance of lower interest rates both in reducing borrowing costs and in easing pressures on the currency," Mr Willox said.

Yet even if the RBA would reduce the existing 4.25 percent interest rate, PriceWaterhouseCoopers' (PWC) analyst Jeremy Thorpe is doubtful that the general manufacturing scenario for much of the year would improve.

"With job cuts continuing to be announced in the manufacturing sector, it is probable the Australian PMI will continue to decline, irrespective of the likely Reserve Bank interest rate cut in May," Mr Thorpe told AAP on Tuesday.

"April figures show 10 of the 12 manufacturing sub-sectors recording a decrease in activity," the PWC analyst said.