The Australian Industry Group's seasonally-adjusted index, released every month, rose from 46.4 in August for a swing of 5.3 points. At the time, this was reported as the 26th consecutive month of contraction, representing the longest such period in the PMI's 21-year history.
On the back of the recent federal election victory by the Coalition and the declining value of the Australian dollar, Australian manufacturers appear optimistic of future industry growth.
Respondents of the latest survey cited factors such as lower interest rates, improved sentiment and actual orders from Australian-based customers as major reasons for the expansion in manufacturing activity.
According to the key findings of the index expansion was strongest in the food, beverages and tobacco sub-sector, which recorded its best result since March 2012 with a score of 60.1, while mild expansion was also evident in some of the smaller sub-sectors including petroleum, coal, chemicals and rubber products (54.1, highest since April 2011).
"The index for the large metal products sub-sector improved to 32.5 points in September, but it remains close to the historically low levels seen in recent months," the Ai Group report stated.
The large machinery and equipment sub-sector declined to 39.7 points in September. This sub-sector has been indicating contraction since January 2012.
"Businesses report there is still a strong preference among many customers to repair or modify existing machinery rather than to replace it, which is dampening demand for new machinery but providing a subtle boost to those who specialise in supplying parts and maintenance services," according to the index summary.