Manufacturing PMI booms!

April fool! The manufacturing recession rolls endlessly on and really is the butt of all jokes:

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The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) moved up by 0.9 points to 46.3 points in March (seasonally adjusted). This indicated a fourth consecutive month of contraction in activity (readings below 50 points indicate contraction) across the manufacturing sector following a brief stabilisation in November 2014.

 The Australian PMI® typically ‘leads’ ABS data for manufacturing output by around 3 months. Recent results from the Australian PMI® suggest growth in manufacturing output (measured as ‘value added’ by the ABS) is likely to be slightly negative again in the March quarter of 2015.

 Manufacturing exports expanded for a fourth consecutive month in March as the impacts of the lower dollar continue to flow through. Much of this growth was concentrated in food and beverages exports, although other manufacturing sub-sectors also experienced a boost in the value of their exports, either due to higher export volumes or a lower dollar.

 Other activity indicators in the Australian PMI® continued to indicate very weak domestic demand. Manufacturing production contracted (i.e. below 50 points) for a fifth consecutive month while new orders fell for a fourth month. Manufacturing sales declined for a 10th month in March. Supplier deliveries and stock levels also contracted for a second month in March after a brief expansion in January, while manufacturing employment contracted for a third month.

 Four of the eight manufacturing sub-sectors in the Australian PMI® expanded (i.e. above 50 points) in March: food and beverages (for a 10th month); non-metallic mineral products (mainly building materials, for a fifth month); wood and paper; and printing and recorded media.

 The lower Australian dollar continues to boost manufacturing export volumes. However, survey participants also noted that the lower dollar is increasing prices for imported inputs. And despite stronger residential building activity, weak local demand continues to weigh heavily on activity. This month manufacturers noted the further drop in mining construction, the progressive closure of automotive assembly, subdued local business investment in equipment, as well as political uncertainties in Canberra and in New South Wales ahead of the state election.

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Full report.

Comments

  1. I don’t know why you guys go on about this all the time. Manufacturing is irrelevant to our great economy! That stuff is for poor impoverished nations. We all know there’s better things to invest in.

  2. Some folks developed a economic system and called it ***FIRE***…. I think that was the first hint…

  3. Why manufacture when you can specufest!? Far more profitable, less effort, less tax… Fk yeah thanks Glenny!!

    • Glenn manufactured a housing bubble. You guys need to start thinking laterally and cut him some slack.

      • [email protected]

        if manufacturing monthly is printed on two ply then good idea Alby

  4. Big Banks Are Doing Badly

    “Three major problems attend the operation of big banks. 1) They are inadequately regulated. 2) They are too large to be properly managed. And 3) free from proper regulation, good management and much supervision, those in banking operations now do several things to bring in more money as profits — a) they assume greater risks than they otherwise would; b) they cheat and engage in fraud more than they otherwise would; and c) they avoid internal supervision and management controls to engage in a) and b) more than they otherwise would. Libor price fixing, laundering scandals, bogus trading, mega loan losses, banking frauds and the like are now daily news.

    From the late 1930’s into the 1970’s, the big banks were much smaller than they are now and bankers were forced to operate in a properly regulated environment, with the Glass Steagall Act and other long time regulation firmly in place since the 1930’s. But times have changed. First, the big banks have since grown very fast.

    Here is the scant growth data I have found. The figures are total assets in $billions of dollars in 2014 vs total assets in $billions of dollars in 1983.

    HSBC . . . . . . . . . . ..$2,750,000 vs. ?
    Morgan Chase. . . . .$2,470,000 vs. $127,000. . . .(19x)
    Barclays. . . . . . . . . $2,260,000 vs. ?
    Deutsche Bank. . . . .$2,250,000 vs. ?
    Bank of America. . .. .$2,150,000 vs. $104,000. . . .(20.6x)
    Citigroup. . . . . . . . . $1,890,000 vs. $104,000. . . .(18.2x)
    Well Fargo. . . . . . . .$1.530,000 vs. $025,000. . . .(61.2x)

    If you are not shocked, you should be. Total assets of the top 4 US banks in 1983 came to just $360,000 billion dollars. By 2014, those assets had grown to $8.27trillion or $8,270,000 billion (22.9x) in just over two decades. And bank asset growth is accelerating.

    Assets of the six largest U.S. banks are up 37% just from 2010. Those six largest banks now have almost 70% of all the bank assets in the entire U.S. financial system. That amounts to almost $10 trillion dollars. The biggest bank in the US, Morgan, Chase, has $2.47 trillion in assets alone — the size of England’s entire economy.The four biggest banks in the U.S. made collectively nearly $45 billion in the first six months of this year, nine times what those same banks made in 2010. Banking has become hyper concentrated, seen massive growth, and is too largely unsupervised, unregulated and out of control, facing huge diseconomoies of scale and management problems.”

    ” Bank size is a mega problem now. Warren seeks to have the big banks broken up and Wall Street is screaming bloody murder about it. Goldman Sacks agrees and says Morgan Chase is worth more broken up than it is now, and so are many other mega banks in fact. They are unmanageable. HSBC, the biggest western bank, is airing it management problems publicly due to size after its big money laundering scandal. Data is developing that banks become unmanageable when their assets exceed about $2.0 to $2.2 trillion dollars. Serious diseconomies of scale set in, lines of supervision and oversight fail, and management simply doesn’t know what is going on, running from crisis to crisis. These conclusions are supported by the former officers and board members of HSBC. Several studies and investigations are pending. This is where Warren’s call for breakup comes from.

    We have a royal mess and a major fight at hand. As usual. politicians are lining up with their purses, but on the wrong side of the issues, but the problems are not going to go way, no matter how much in bribes is paid” – KC

    Skippy…. Seemingly the activity’s post GFC have been purely to amortize all the bad credit created in the run up to the GFC, now the problem seems how to restructure with out asset valuations going poof when management is a forgone conclusion.

    • Helpful link, Skip!
      More on Elizabeth Warren and what helped shape her beliefs / positions. We might feel like we’re hopelessly stuck, but the right recovery ‘kit’ and a little effort ( and enthusiasm) can make a difference.
      http://www.newyorker.com/magazine/2014/04/21/the-warren-brief
      Note: It’s going to be a tough sell while cheap debt and rising asset prices seem like such a tasty recipe that anyone can prepare. There’s a lot of folks riding high powered motorcycles in singlets, shorts and thongs and surprisingly, not many have come off the saddle at speed, yet.