January 01, 2025 at 10:00PM
A very ugly result, comes in at 47.8
slumping further from November’s awful 49.4
and below the flash estimate of 48.2
The flash reading for this can be found here:
Australia preliminary manufacturing PMI December slumps to 48.2 (prior 49.4 )
In summary:
Deterioration in Conditions:
Manufacturing conditions declined at a faster pace in December, marking the 11th consecutive monthly contraction (PMI at 47.8).
Faster reductions in overall and export orders contributed to deeper manufacturing output contraction.
Economic Drivers:
Elevated interest rates and reduced demand from major export markets (US, Europe, Asia, New Zealand) led to declining new orders.
Capacity pressures eased, leading to job shedding and a reduction in outstanding business.
Inventory and Purchasing:
Firms reduced purchasing activity and inventory holdings, reflecting reluctance to hold stock amidst falling demand.
Stocks of finished goods fell for the 11th time in 2024.
Cost and Price Dynamics:
Input costs rose due to higher material, energy, and shipping costs, coupled with supply constraints causing longer vendor lead times.
Selling prices increased as firms passed on cost burdens, with output price inflation at its highest since October but below the long-run average.
Business Confidence:
Despite the downturn, business confidence reached its highest level since August 2022, fueled by optimism for lower interest rates and local elections in 2025.
Outlook:
Firms remain hopeful for improved production prospects in the coming year despite intensified cost pressures and ongoing challenges.
more to come
This article was written by Eamonn Sheridan at www.forexlive.com.