Ooooooaaahhhh. The AIG manufacturing PMI has slumped again, down 5.4 points in November to 47.7 points and back in recession. The culprit:
Growth in food and beverages manufacturing slowed while expansion rates improved in some of the smaller sub-sectors. The non-metallic mineral products, metal products and machinery and equipment sub-sectors continue to show contraction.
Comments from survey participants indicate that the mild lift in local new orders that was apparent immediately after the September federal election is already drying up, as mining, government, maintenance and R&D spending slows. The relatively high Australian dollar and fierce import competition continue to take their toll, as many businesses struggle to maintain market share in an environment of generally weak demand for goods.
The internals are a little better than the headline with new orders not down so low and employment up a little:
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Another disappointing report with a fading election bounce. Hopefully a hiccup and not a new trend.
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.
