Get yourself a hard hat

Some boom. According to Bloomberg:

Australian manufacturing contracted in January for a fifth straight month as measures of inventories, wages and supplier deliveries declined, a private survey showed.

The manufacturing index was 46.7, compared with 46.3 in December, the Australian Industry Group and PricewaterhouseCoopers said in a survey released in Canberra today. A number below 50 indicates contraction. Capacity utilization rose to 73.9 percent from 72.3 percent a month earlier, it showed.

Five months in recession. If manufacturers are building stuff for miners to offset export losses, it ain’t obvious…

David Llewellyn-Smith

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

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  1. “If manufacturers are building stuff for miners to offset export losses, it ain’t obvious…”

    IMO the extent of our Dutch Disease is underestimated by the mainstream economists, media and our politicians.

    When the issue of our high dollar hurting tourism, education and all our other exports comes up someone waxes lyrical about how this is just a natural “freeing up” of labor for the mining industry (let’s just ignore the fact that mining directly employs a tiny fraction of the labor force) and how the goodies from the boom will flow through to the broader economy.

    No economic modelling, no facts, no figures – just rhetoric. A bit of rigour from the commentariat and our political and financial overlords would be nice.

    Quarry Australia, baby!

  2. Crocodile Chuck

    The A$ has risen in value by 17% since August last year, on top of our high cost, high wage, regulated manufacturing environment. In one sense its a miracle anything gets built here.