Manufacturing PMI tanks

Not that anyone cares, but the local manufacturing PMI is out and has tanked into deep recession again:

• The latest Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) fell sharply in April, dropping by 3.1 points to 44.8 points (seasonally adjusted). This signalled the fastest pace of contraction in the manufacturing industry since July 2013 (readings below 50 points indicate contraction).
• This month the production sub-index of the Australian PMI® fell by 6.6 points to 42.6 points while the new orders sub-index dropped by 10.5 points to 41.8 points, following an expansion in new orders in March. Reflecting these difficult trading conditions, manufacturing employment contracted at a faster pace in April (down 1.4 points to 43.6 points).
• Conditions remain extremely difficult in the manufacturing export markets, with the exports sub-index remaining around 30 points this month. On the other hand, the stocks sub-index improved to 49.3 points this month, edging close to stabilisation. The supplier deliveries sub-index also increased, reaching its first expansion since October 2013.
• Manufacturing selling prices fell at a slower pace in April, with this sub-index rising by 6.9 points to 46.1 points. Manufacturers’ margins remain under significant pressure, even though wage growth remains relatively constrained and growth in input costs also slowed.
• Across the manufacturing sub-sectors, four expanded and four contracted in April. The very large food and beverages sub-sector expanded again this month (up 1.8 points to 55.2 points, three month moving average). The petroleum, coal, chemicals and rubber products (56.8 points), non-metallic minerals (58.5 points), and smaller wood and paper products (51.7 points) sub-sectors all expanded too, although their pace of expansion slowed notably this month. The large metal products and machinery and equipment sub-sectors contracted again in April (three month moving averages), with the metal products sub-sector indicating a continuous period of decline since September 2010.
• Respondents to the Australian PMI® widely cited a lack of new orders and activity in the manufacturing industry this month, even after allowing for the usual run of seasonal holidays in April. Many also pointed towards renewed strength in the Australian dollar, which has reportedly intensified import competition and dampened demand for locally made products.

The internals are shite with tumbling production, collapsing new orders, job shedding and inventory draw down halted:

I am very close to bringing forward my next rate cut.

Full report here.