Australian January (final) Manufacturing PMI 50.0 (prior 50.2)

Preliminary and priors for this, the Markit / S&P Global / Judo Bank Australia Manufacturing PMI, can be found here:

• Flash PMIs from Australia for January 2023

From the report, Warren Hogan, Chief Economic Advisor at Judo Bank:

“The January PMI report highlights some key trends impacting the Australian manufacturing sector in early 2023.

“Firstly, activity is slowing down with both output and new orders continuing to fall - both are now below the 50 mark. There has been a gradual softening of manufacturing activity over the final months of 2022 which looks set to continue in early 2023. Business remains optimistic about future economic activity which suggests the current slowdown will be mild.

“The second issue is supply chain normalisation. Inventories, the backlog of work and supplier delivery times, have all returned to what would have been regarded as normal levels prior to the pandemic after three years of stresses and strains. For most manufacturers supply chain operations have all but normalised in early 2023.

“Despite the slowdown in activity labour demand remains strong, with the January result rising well above the 50 level. Labour demand has moderated from the very strong levels seen in 2021 and early 2022. The January employment reading rose and is at a level historically consistent with an expanding manufacturing workforce. This is consistent with the current slowdown in manufacturing activity being mild.

“Finally, we are seeing a moderation in price pressures in early 2023 consistent with the view that inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term has peaked in late 2022. Inflation pressures remain elevated and well above a level consistent with the RBA’s 2% to 3% inflation target. We will need to see further declines in the price indicators in 2023 to be comfortable that inflation is returning to the central bank’s target.

“Australia’s manufacturing sector is on track for a soft landing Soft landing A "soft landing" in the economy refers to a situation where economic growth slows down, but does not fall into a recession. This is often the desired outcome for policymakers, as it allows them to make adjustments to the economy without causing widespread job losses or other negative effects associated with recessions.An example of a soft landing in the economy occurred in the United States between the years of 2004 and 2006. During this time, the Federal Reserve raised interest rates to cool do A "soft landing" in the economy refers to a situation where economic growth slows down, but does not fall into a recession. This is often the desired outcome for policymakers, as it allows them to make adjustments to the economy without causing widespread job losses or other negative effects associated with recessions.An example of a soft landing in the economy occurred in the United States between the years of 2004 and 2006. During this time, the Federal Reserve raised interest rates to cool do Read this Term in 2023, while the operating environment is quickly returning to normal following three years of pandemic induced disruption.”

The above is in full from the report. Hogan is a smart cookie., well worth paying attention to.