Judo Bank / S&P Global PMIs from Australia for April 2023, final.
Services 53.7
- preliminary was 52.6
- prior 48.6
Composite 53.0, highest since June of last year
- preliminary was 52.2
- prior 48.5
Earlier this week:
Commentary from the report:
- “The Services PMI has increased at the strongest pace in a year suggesting that the domestic services economy has stopped slowing and is once again picking up momentum as we head into winter. The Composite Output index highlights this apparent cyclical turnaround with a clear upturn now evident.
- “All activity indicators confirm the shift in Australia’s economic momentum adding weight to the conclusion that the overall economic slowdown appears to be over. I would like to see another month of strength before drawing a strong conclusion, but the implications appear clear; the RBA may have more work to do if they wish to get inflation back down to their 2% to 3% target.
- “The employment indexes also jumped from what were already positive levels, consistent with the official employment results showing strong employment growth in recent months. If business activity continues to expand, there is a risk that the tightness of the labour market will dampen the slowdown of input prices, through higher wages.
- “The good news on economic activity is matched by some further good news on inflation, with input prices rising at the slowest rate in 18 months and charge inflation only slightly above March’s 20-month low. The current level of both price indicators remain higher than what we saw in the economy prior to the pandemic and suggests that domestic inflation remains uncomfortably high. The latest results bring into question the outlook for a soft landing for the economy. Not because we are seeing a growing risk of a hard landing but as we saw in many economies overseas, the risk appears to be for ‘no landing’. It is too early to make this call but that is where the risks may lie.”
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Yesterday the RBA hiked its cash rate:
2 of 3 analysts in the Bloomberg survey of expectations were looking for an RBA 'hold' decision, so the hike was a surprise to them.