- Australia’s manufacturing sector continues to contract head into the year-end.
- Australian Manufacturing PMIs slid to 47.7 in November, a ninth-straight monthly contraction.
Australian Manufacturing Purchasing Managers’ Index data for November saw the headline index decline for the ninth-straight month into 47.7 on the month, down from October’s official reading of 48.2.
Orderbook volumes and manufacturing production levels both declined for a twelfth straight month, and a lack of capacity pressure saw sector employment decline for the first time in three years.
According to Warren Hogan, Chief Economic Advisor at Judo Bank, “The Australian Manufacturing PMI fell further in November to record the lowest reading in the 8-year history of the survey outside of periods of lockdown. The PMI fell below 48 which is an index level broadly consistent with a soft landing for the manufacturing sector and the wider economy.”
Market Reaction
The AUD/USD is seeing little movement heading into the Asia Friday market session, trading close to the 0.6600 handle.
About the Australia Judo Bank Manufacturing PMI
The Manufacturing Purchasing Managers Index (PMI), released on a monthly basis by Judo Bank and S&P Global, is a leading indicator gauging business activity in Australia’s manufacturing sector. The data is derived from surveys of senior executives at private-sector companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the Australian Dollar (AUD). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for AUD.
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