Australia's manufacturing weakened in the September quarter against the backdrop of international economic uncertainty and a drawn-out federal election, a new business survey suggested on Thursday.

The Westpac-Australian Chamber of Commerce and Industry survey of industrial trends, released on Thursday, showed its actual composite index falling 7.1 points to 49.5 in the September quarter.

It was the lowest level in a year and below the 54.8 predicted in the June quarter survey.

At near 50, the index implied a stalling in manufacturing expansion, after signalling above trend growth in the first half of the year.

"We were surprised by the degree of deceleration ... the second half of the year is going to be basically flat in the manufacturing sector," Westpac senior economic Huw Mckay told reporters in Canberra on Thursday.

The September quarter outcome was largely in sync with global trends, as all economies struggled with the transition from government-led economic growth to private sector-led growth as respective stimulus packages are unwound.

Aug. 21 inconclusive election uncertainty also clearly played a role in the latest result, Mckay said that 80 percent of responses to the survey were taken after polling day.

According to the survey released, the expected composite index also fell 4.6 points to 50.2.

The chamber's director of economics and industry policy, Greg Evans, said expectations had moderated across the survey, including those for selling prices, suggesting little threat to the inflation outlook.

"There would be no need, certainly in the short to medium term, and indeed this side of Christmas, for any intervention by the Reserve Bank (through higher interest rates)," Evans told reporters in Canberra.