Judo Bank S&P Global PMI Flash / Preliminary for April 2024
- Manufacturing nearly jumped into expansion at a 3-month high, but not quite hitting the 50 line.
- Services a tickle lower.
- Composite moves to its highest since April 2022
Some of the pertinent commentary from the report. On inflation pressure:
- The price indicators were up slightly in April, suggesting inflation within the Australian economy is above the RBA’s target and ‘sticky’.
- Cost pressures are rising, which survey respondents put down to a combination of higher raw materials prices and the effects of a weaker Australian dollar.
- While margin pressures are still evident in both the service sector and the manufacturing industry, businesses are still succeeding at passing on higher costs to final prices.
On the RBA, bolding is mine:
- The Judo Bank PMI highlights the resilience of the business sector in Australia. The business sector continues hiring and investing even as consumers remain cautious. With employment levels continuing to expand and pressure on household finances easing in 2024, this ‘soft landing’ view is increasingly being threatened by the ‘cyclical recovery’ view.
- The RBA will likely be concerned that a pick-up in activity, before inflation returns to target, could threaten medium to long-term price stability.
- These results are inconsistent with interest rate reductions at any stage in the foreseeable future and raise the risk that the RBA may have to start hiking again at some stage over the back half of 2024.
