PMI has a decent bounce

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The AIG PMI is out this morning and although still contracting shows a decent bounce:

Manufacturing activity contracted for a fourth consecutive month in June, but the pace of contraction slowed significantly. The seasonally adjusted Australian Industry Group-PwC Australian PMI® rose 4.8 points to 47.2 (readings below 50 indicate a contraction in activity with the distance from 50 indicative of the strength of the decrease).

  • Despite the continuing decline in total manufacturing activity, four sub-sectors reported an expansion in June. These were clothing & footwear; paper, printing & publishing; transport equipment; and machinery & equipment.
  • Survey respondents remained cautious about the outlook, citing softer demand, the strong Australian dollar, the impending carbon tax and import competition as inhibitors of activity.
  • Wages and input costs continued to rise in June, while the decline in selling prices persisted.
The bounce was driven by new orders:
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But there was an improvement in broader sub-component too. Still contracting but better news.
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Pmi June12 Web FINAL (1)

About the author
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.