Australia CBA / Markit preliminary PMIs for May
- Manufacturing 42.8 vs. prior of 44.1
- Services 25.5 vs. prior of 19.5
- Composite 26.4 against a prior of 21.7
Key points highlighted by CBA/Markit:
- signalled a further substantial decline in business activity in the Australian private sector as a result of the coronavirus disease 2019 (COVID-19) pandemic.
- Although May saw the tentative easing of restrictions, this was only enough to see a slight softening of the pace of contraction as demand continued to fall sharply.
- companies were much more confident regarding the 12-month outlook than they were in April.
Comment from CBA Head of Australian Economics, Gareth Aird:
- "Another incredibly weak result that indicates the contraction in activity observed in April intensified over May. Two consecutive reads in the 20s is simply astonishing as well as concerning. It is likely that only a manufactured slowdown due to imposed restrictions could produce such results."
- "May should mark the low point in the PMIs and we would expect activity to lift from here on a monthly basis. Company views on the economic outlook have improved and the lift in confidence is welcome. That said, it will be a long time before activity returns to pre-COVID-19 levels. And deflationary pressures highlight the huge amount of slack we have now in the economy."
Bolding above is mine. Yep, maybe the bottom is in but its a long road ahead for recovery.
more to come
