Xinhua Finance Sydney, March 2 (Reporter Li Xiaoyu) The latest data report released by financial analysis firm S&P Global showed that the Judo Bank Australia Manufacturing PMI (Judo Bank Australia Manufacturing PMI) was 47 in February8 points, down from 50 in January1 point.
In January this year, the index returned above the withering line after falling below the 50-point withering line for the 10th consecutive month, but in February the index fell below the withering line again. This shows that Australia's manufacturing industry has fallen into a slight contraction again.
Judo Bank Australia Manufacturing PMI is a weighted average calculated based on the output index, new orders index, employment index, ** merchant delivery time indicator and purchased inventory index. A reading above the 50-point line indicates that Australia's manufacturing sector is expanding, while a reading below 50 indicates a contraction in the country's manufacturing sector. The manufacturing PMI index released this time is the final data. S&P Global released a quick look at the manufacturing PMI index for February on February 22, which was 477 points.
According to the latest report, the contraction in Australia's manufacturing sector in February was due to the acceleration of the decline in new orders, which led to a faster decline in output and backlog, which in turn led to a decline in procurement activity and employment. At the same time, the situation of chain constraints has worsened, further extending the delivery time of **merchants and accelerating the average inputs**.
Specifically, in February, the decline in new orders in Australia's manufacturing sector widened to its highest level in three months, and its top orders fell faster than in January. Several factors weighing on manufacturing demand include weak domestic and overseas market conditions, as well as higher interest rates and high inflation. As a result, the decline in output in the manufacturing sector reached the highest level in the period outside of the pandemic. Finished goods inventories fell in February, despite the fact that manufacturing companies still have unfulfilled orders for production. In response, Australian manufacturing companies continue to reduce employment levels, and the reduction is more than January's level.
Meanwhile, Australian manufacturing firms reduced their purchasing activity in February as new orders and output fell, but their input inventories edged higher. This is because the average delivery time of the first merchant in the month has been extended for the 8th consecutive month, and the extension is larger. As a result, businesses have increased their safety stock levels.
In addition, the pressure on Australia's manufacturing sector also rose in February. Rising raw material, transportation and energy costs led to an acceleration in average inputs for the month. In response, Australian manufacturing companies have raised their products** by the largest amount since September last year to pass on the increased cost burden to customers. However, both inputs** and products** grew below their historical averages.
Finally, the overall sentiment in the Australian manufacturing sector remains positive, with business confidence levels improving. Companies are generally hopeful about sales growth over the next 12 months, but there are also concerns about increased competition and inflation.
Warren Hogan, chief economic adviser at Judo Bank, an Australian digital bank, said the Australian manufacturing PMI in February returned to the level of the second half of last year. While this level means that the manufacturing sector is in contraction, it is still much higher than the historical level when the industry or the Australian economy as a whole was in recession.
He said Australia's manufacturing sector had not grown consistently, calling into question expectations for a post-pandemic recovery in the manufacturing sector. Over the past year, the weakness in the manufacturing PMI is likely to reflect capacity constraints in Australia's construction sector, the main driver of the manufacturing sector, or even a cyclical slowdown in the broader economy. But it's too early to wonder if Australia's manufacturing sector will actually recover in the 2020s. In fact, if demand rises quickly, the industry's output seems to be opening up right away.
Editor: Wang Yuanyuan.
Statement: Xinhua Finance is a national financial information platform undertaken by Xinhua News Agency. In any case, the information published on this platform does not constitute investment advice. If you have any questions, please contact customer service: 400-6123115