Australia CBA PMI Manufacturing rose to 51.1 in June, up from 51.0. CBA PMI Services rose to 53.3, up from 51.5. Commonwealth Bank of Australia noted that output and new business both expanded at the steepest rates for seven months. Solid increase in outstanding workloads lead firms to raise their staffing levels for the second month in a row. Input costs jumped as sharpest pace since last November. But selling price inflation remained modest.
Commenting on the Commonwealth Bank Flash PMI data, CBA Senior Economist, Gareth Aird said: “An encouraging result, particularly for the services sector. The uncertainty generated by the federal election has been removed which appears to have had a positive impact on business activity. The economy has been in a soft patch, but there are some green shoots emerging. The combination of monetary policy stimulus, forthcoming tax rebates and strong employment growth has contributed to the sharpest lift in the index since late last year. While the overall level of the composite index signals modest growth, we are taking some comfort from the direction the index is heading. The growth in input costs points to some margin compression. But if firms can pass on some of those costs due to a lift in demand we may see a modest rise in consumer inflation over H2 2019 and into 2020.”
