Australia Final January Manufacturing PMI 50.1 (prior 47.8) – with a warning on inflation

<p>Australia S&amp;P Global / Judo Bank Final January 2024 Manufacturing PMI has hit an 11-month high 50.1</p><ul><li>preliminary was 50.3, prior was 47.8 in December</li></ul><p>Some of the commentary from the improved report, with a warning on inflation</p><ul><li>Over the past two months, the rise in the new orders
index is the strongest in more than 18 months.
</li><li>Price indicators declined in January, suggesting further
disinflation over the first half of 2024. Notably, the
manufacturing input price index remains on the downtrend
despite global and domestic shipping disruptions.
</li><li>A reasonably reliable relationship exists between the
PMI Suppliers’ Delivery Times index and goods inflation in
Australia. The recent fall in the delivery times index suggests
that the disinflation of goods prices over the past 18 months
has run its course.</li><li>The current Suppliers’ Delivery Times index reading of 41.1 is
broadly consistent with goods price inflation of around 4%,
which is roughly where goods inflation was in November.
The issue is that most forecasters had been expecting
further goods price disinflation, if not outright deflation, as
part of their overall Australian inflation outlook.</li><li>This suggests that if supply chain disruptions in the shipping
sector are sustained over the months ahead, the inflation
outlook could be reassessed as goods price inflation proves
to be stickier than previously thought.</li><li>Overall, the first read on Australian manufacturing activity
in 2024 shows a welcome improvement in activity and
confidence, which points to the potential for a cyclical
recovery over the course of 2024.</li></ul>

This article was written by Eamonn Sheridan at

Leave a Comment

Leave a Reply

Your email address will not be published. Required fields are marked *