Growth was maintained in the Australian private sector during December, but signs of softer demand were evident across both the manufacturing and service sectors. New orders increased at the slowest pace in four months, with output growth and job creation slowing accordingly. Meanwhile, business sentiment was at a two-and-a-half year low. There were further signs of inflationary pressures waning, with input costs rising at the slowest pace in almost a year.
At 52.4 in December, down from 53.9 in November, the headline index signalled a slower increase in business activity in Australia, with growth remaining subdued relative to the first half of the year. Weaker rises in output were recorded across both the manufacturing and service sectors in December, with manufacturing production growth at a four-month low. Where activity increased, panellists linked this to higher new orders. There were further reports of a softening demand environment, however, as new business rose at the slowest pace in four months.
I think the services PMI got popped by Black Friday in October and is reverting to the slower trend. Full report.
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.
