Australia CBA PMI manufacturing dropped to 51.4 in July, down from 52.0. PMI services dropped to 51.9, down from 52.6. PMI composite dropped to 51.8, down from 52.5.
CBA noted that “Slower growth fed through to staffing levels, which decreased for the first time in three months.” More importantly, employment decreased for the greatest extent since the survey began in May 2016. Reduction in jobs were centered of service sector.
Commenting on the Commonwealth Bank Flash PMI data, CBA Senior Economist, Belinda Allen said:
“A slight retreat in growth momentum in business activity in July, although the index does sit comfortably above the critical 50 level that separates expansion and contraction”.
“Overall the “flash” PMI does suggest business activity should continue to expand in Q3. A combination of monetary policy stimulus, tax rebates currently hitting household bank accounts and early signs of a recovery in the housing market should see the Australian economy stabilise, if not pick up over the 2H 2019. The sharp fall in employment intentions underlines the importance of the tax cuts now filtering into the economy and calls for more policy stimulus via infrastructure spending and microeconomic reform. Input costs continued to lift and is worth watching if businesses can pass it on, we could see some impact on consumer inflation over 2H 2019 and into 2020″.
