Judo Bank / S&P Global November Manufacturing PMI comes in at 47.7, in line with the preliminary (flash) result.
Last week we had the flash reading:
Key points made in the report:
- Sharpest fall in new orders since May 2020
- Marginal decline in staffing levels
- Slower rates in inflation signalled
On that point about inflation, this from Warren Hogan, Chief Economic Advisor at Judo Bank in the report:
- “The good news is that the inflation indicators are continuing to
improve with both the input and output price indexes down in
November.
- “Input prices, essentially an indicator of cost pressures, are showing
a gradual easing in recent months after jumping up through the
middle of the year. Input prices remain elevated and well above
the average levels seen prior to the pandemic.
- “Output prices have all but normalised for Australian manufacturers
which while good news for the broader inflation picture, is bad
news for manufacturers margins and profits as cost pressure
remain elevated.
- “There is strong evidence in the November survey that
manufacturers capacity to pass on cost pressures has been
compromised by the broader economic slowdown. This is
pressuring profitability and business activity and will work to
reinforce the slowdown in economic activity already underway.
- “For the RBA these results should be welcome news. The Judo
Bank Manufacturing PMI confirms that the economy is responding
to higher interest rates with weaker activity and easing inflation
pressures.
- “While the steep decline in new orders since September is
concerning, the overall picture painted by the latest Australian
manufacturing PMI is of a soft landing for the economy with a
meaningful easing in inflation pressures.”
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Speaking of the RBA, the Reserve Bank Board meets next Tuesday, December 5. The Bank raised the cash rate again in November after a months-long pause. The Bank is widely expected to be on hold next week.