Australia June final Manufacturing PMI 48.2 (flash was 48.6, prior 48.4) | Forexlive

Judo Bank / S&P Global PMI for June 2023

Manufacturing comes in at 48.2.

Flash reading is here:

Commentary from the report from Warren Hogan, Chief Economic Advisor at Judo Bank, in summary:

“Australia’s manufacturing sector is on track for a soft landing with further evidence in June of soft activity, weakness in new orders and easing price pressures. The overall manufacturing PMI dipped in June to 48.2, a level that is historically associated with a cyclical slowdown in activity, but is still well above recession readings, which typically see PMI readings below 42.

New orders are particularly soft in recent months

• Exports are also soft
• The employment index is also on a clear softening trend, although it remains above the 50.0 neutral level suggesting that not only are manufacturers potentially hoarding labour, but are looking for new staff despite the slowdown in activity.
• Not only are firms hoarding labour through this soft patch in activity, but inventory levels also remain low, of both inputs and finished goods.
• The only concerning feature of the latest report is a further fall in the backlog of work across the industry. At 41.7, this index is at the lowest level in three years and suggests that firms have a very weak pipeline of work, which could leave them vulnerable to a further deterioration in new demand
• The most welcome feature of the latest PMI report for Australian manufacturing is a further easing of the price indicators. Both input and output price indexes fell to cycle lows. Indeed, the latest input price index is one of the lowest in the past eight years, pointing to some mild deflationary pulse entering the manufacturing pipeline.
• We have seen a full normalisation of manufacturing supply chains in 2023, which combined with a cyclical slowdown in the demand for manufactured goods, is nullifying inflationary pressures on the goods side the economy.

And, on implications for the RBA meeting tomorrow:

• “The latest results suggest the RBA may have some breathing space on interest rates and could afford to wait for more information at the July Board meeting before taking any further actions to tighten domestic monetary policy.”

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ps. The whole world is bitchin’ and whining about the poor China Manufacturing PMI for June:

Australia’s is worse!