Construction crash to drive endless Aussie recession

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Markets have stopped discounting bad Aussie data in the past few months as global trading dynamics overtake fundamentals. But it is worth revisting the new year PMIs to recall just how bad is the Australian economy right now, as well as how much policy work remains ahead.

The AIG PMI series released in the first few days of January was a triptych wipeout. Manufacturing fell into contraction led by the construction bust:

The services PMI likewise fell into contraction led by the construction bust:

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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.