And the laugh of the day goes to the Australian Industry Group who described this morning’s crash to a three and half year low in the manufacturing PMI as a “dip”. A virtual non-stop recession for two and half years hasn’t dented their spirits!
The internals were ugly. New orders fell sharply and and exports plumbed new GFC lows:
The employment trend is poor:
Pricing power is poorer:
But there were a couple of rays of sunshine. Most segments actually shrank more slowly:
And finished stocks are running down so low that if there is an uptick in demand, production will have to rocket:
There is a global manufacturing rebound going on right now so this report rather suggests that the high dollar is decimating local production. Just as well that the “dip” will soon pass.
pmi report january 2013 final.pdf
The sounds of silence…
Yet housing somehow flatlining. And Unemployment is still low I don’t get it.
I guess ultra lax foreign investment rules, especially for apartments can explain the former but the latter is a mystery (to me at least).
The wheel turns very slowly….
Underemployment is rising – with many full time jobs being replaced with part time and casual – helps to mask the problem.
And with a large cross section of the work force now engaged under flexible contractor arrangements the true scope of underemployment may never be known.
There’s an army of underemployed out there… I should know, I’m one of them.
I suspect a lot of 20-somethings are underemployed, surviving by staying living with their parents
…and further if unemployment, and underemployment, AND high student debt, is common for 20-somethings, who is going to buy all the 3/4 bedroom suburban homes over the next 10-15 years as boomers move out?
Well at the moment we have
Manufacturing being creamed
Services being creamed
State sector being creamed
Retail flatlining
What actually is growing?
Are we seeing housing and construction go anywhere yet?
The price of iron ore is …..’growing’
What actually is growing?
The ASX200, especially WBC, CBA, ANZ…
Mortgage debt
Frustration levels.
This thread
Our trade deficit, CAD and AUD..
So what are we supposed to do when we get there now? “2012 now has an official measure (of) 53,676 New Zealanders leaving for Australia….This is the largest number of people to depart for Australia in any calendar year since records began in 1978″ C’mon ,Guys. Get your act together. Our property market is relying on you…..
And only a two year wait till full access to the welfare gravy train. Till then bunch up two or three families to a cheap rental and wait it out.
It’s not a two year wait, unless you can get PR then you can’t get welfare as far as I know. this is why I make the below comment on how many may have to go back to NZ later when the economy hits the fan. NZ citizens can get medicare etc… but unless they apply for PR they can’t get much else. And applying for PR is no different than someone from another country applying, all the stricked rules apply. It’s interesting that in this respect if you are a foreign student (I won’t say from where) you have a much higher chance with a fake degree of getting a job with a work visa and PR.
“It’s interesting that in this respect if you are a foreign student …..you have a much higher chance with a fake degree of getting a job with a work visa and PR”
Very true and something that is entirely unacceptable. As soon as the AUD corrects, those numbers are going to sky rocket again. This rort should be shut down immediately.
Fortunately the Government has some advice for manufacturing:
http://www.theaustralian.com.au/national-affairs/adapt-or-sink-greg-combet-warns-industry/story-fn59niix-1226561351777
So now government is good…
Depends if you agree with the advice or not…
Depends on whether government advice aligns with mining sector interests or not…
This Govt has form on good advice and especially, good judgement.
And with the plethora of Industrial Unions ex’s in Govt I’m dumbfounded as to why they havent yet implemented solutions. They are Govt after all.
I think those in (particularly employed by) manufacturing, service the state sector and retail (inter alia) have some advice for government
‘Adapt or sink people warn government…’
Sorry I cant see the Australian piece, I have blocked my computer from accessing Uncle Rupert.
So the AUD can’t be squashed….
The manufacturing plant I work at is shedding staff at an alarming rate this year.
Many of the people being removed are skilled from areas of the company such as maintenance and management. While it is good to see unnecessary management go – most management is unnecessary and has debatable contribution to productivity – it is short-terminism to force useful and skilled employees to leave, especially those required for maintaining efficient production machinery.
Give them a pay cut, or freeze, to increase competitiveness and productivity in the global market, but don’t force them to leave.
The really dumb thing in all of this is that only a few months ago maintenance were given a pay rise. Instead, our glorious managers should have frozen pays citing that it would prevent job loss down the track.
Personally I would take a pay cut over a job cut every time if it was in the name of global competitiveness and productivity.
The problem, of course, is that huge anvil of debt hanging over everyone’s heads. It forces incomes to be set to a certain minimum level in order to pay the bank their dues. And because incomes are set, prices need to be set too. How else are incomes paid if not by sale of goods and services?
JJF, in some ways this is exactly what has happened in Germany over many years. Recent articles on the modest resurgence in US manufacturing indicate that some unions have negotiated wages down in order to secure jobs – and these are formerly unions used to calling the shots.
Where does it all lead? Globalised production (and automation) have irrevocably changed the manufacturing landscape.
The bits of the USA where manufacturing is rebounding fastest, are the bits where housing and urban land is cheapest and has been stable in price for decades, and growth has been sustained for decades.
Australia has no equivalent of these cities anywhere.
You mean Mexico
Nice joke. For the benefit of the less erudite, no, I meant Southern USA and parts of the heartland.
http://www.newgeography.com/content/003451-how-the-south-will-rise-to-power-again
‘The problem, of course, is that huge anvil of debt hanging over everyone’s heads. It forces incomes to be set to a certain minimum level in order to pay the bank their dues. And because incomes are set, prices need to be set too. How else are incomes paid if not by sale of goods and services?’
There’s the single, fundamental reason why we’re a grossly overpriced nation and now reading threads like this one.
The McKinsey Institute, in their 1998 paper “Driving Productivity and Growth in the UK Economy”, said that one of the main reasons productivity was so low (20% to 40% below what it should have been, in fact) in the UK economy, was that the urban planning system prevented anything like Silicon Valley from ever happening.I suggest the Australian urban planning system is causing the Australian economy to follow the UK economy down the gurgler.
Growth containment urban planning, besides preventing any Silicon Valley type phenomenons from happening, basically shuts down whatever part of the economy is both urban based and requires reasonable amounts of land. Consider what would happen to farming if “planners” said that it must all now take place in multi-storey buildings. Well, economies have numerous different industries with differing requirements for land that falls somewhere between Farmer Joe and accounting firms.
Planners are so ignorant about the real world economy and how wealth is created, they think Manhattan can be recreated everywhere. Presumably everyone works as a stockbroker or a bureaucrat in the post-modern economy. I have a term for this: the “Second Life” fallacy.
Who cares if manufacturing is suffering? The RBA saught to rekindle the love affair with hpusing and looks like it’s starting to pay off. Bloody disgrace if you ask me. Careful what you wish for Glenny.
Those stats and graphs depict a dying industrial sector. Whatever has been done in the past simply is not working.
Combet’s advice is chilling. Your on your own , boyz. But to be expected when your upbringing, education and policy bent is so Anti Business.
Australia has a manufacturing sector????
Who knew?
“There is a global manufacturing recovery going on right now”
what leads you to say this?
China’s PMI lower,
(http://www.macrobusiness.com.au/2013/02/chinas-manufacturing-pmi-growth-slows/)
Eurozone PMI like indicators are horrible
(from http://www.macrobusiness.com.au/2013/02/spain-heads-for-crisis/)
D.E. writes
“…Other retail PMI data is available from Markit here, apart from Germany the data remains very poor:…”
Just two of today’s stories seem to go against your view.
Fair enough. I should have “rebound” not recovery. North Asia, Euerope, US all up since Sep. Will change.