Ranked as the fastest for the past eight years, the Australian manufacturing growth fell down in May for the first time as new orders slowed following the central bank's decision to boost its interest rate for the sixth month since October.

In a survey released today by the Australian Industry Group and the PricewaterhouseCoopers, the index for manufacturing surged down 3.5 points from April. It also shows that above 50 means the industry is expanding.

"The continuing growth in manufacturing in May is a welcome sign of a recovery that has achieved some traction,” said Heather Ridout, chief executive officer of the Australian Industry Group.

“Unfortunately, the patchiness of the past several months also continues and there are worrying signs of weakness among the consumer-related sub-sectors of the industry.”

The manufacturing survey was conducted on more than 200 companies and were asked about production, new orders, deliveries, inventories, and employment.

According to the central bank, its sixth interest rate move have caused the borrowing costs close to their “average” levels for several business and household borrowers. The series of interest rate increase have put the benchmark lending rate by 150 points between October and May from 3 per cent.

“The sluggishness among the consumer-related sub-sectors reflects the cumulative impact of six rate rises out of seven RBA meetings and, to a lesser extent, an erosion of confidence against the background of falling global stock markets,” Ridout said.

Reports disclosed today showed that inventories slowed down by 8.8 points to 52.1, while new orders declined to 4.9 points to 54.6.