Manufacturing PMI slows

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Via AIG:

▪ The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI® ) fell 4.8 points to 58.3 points in April, indicating a slower – but still buoyant – rate of expansion in April, after reaching a record high in March (seasonally adjusted). Results above 50 points indicate expansion with higher results indicating a stronger expansion.

▪ April 2018 marked a nineteenth month of expanding or stable conditions for the Australian PMI® and the longest run of continuous expansion since 2005.

▪ Five of the seven activity sub-indexes in the Australian PMI® indicated expansion in April, but at a slower pace than in March. New orders, production and sales remained above 60 points, indicating healthy demand and a strong likelihood of further near-term growth. The exports sub-index contracted mildly, indicating a pause in exports. Employment decelerated and stock levels (inventories) were stable.

▪ Six of the eight sub-sectors in the Australian PMI® expanded and two contracted in April (trend). Four of the eight sub-sectors reached record highs in trend terms, including the petroleum, coal, chemical and rubber products; metal products; machinery and equipment and the textiles, clothing & other sub-sectors. Weaker conditions remain evident in the relatively smaller wood & paper and printing & recording media sub-sectors.

▪ With the exception of high energy costs (which continue to eat into margins), manufacturing conditions remain positive on the east coast. Manufacturers in NSW and Victoria continue to report strong demand because of higher levels of activity in the civil engineering (mainly transport projects), commercial building and residential construction industries.

Still very strong. Full report.

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.