Australia CBA PMI Manufacturing dropped to 49.4 in September, down from 50.9 and missed expectations. That’s the first contraction reading since survey began in May 2016. On the other hand, PMI services improved from 49.1 to 52.5. PMI Composite rebounded from 49.3 to 51.9. CBA added that “overall, new order growth picked up and stronger confidence was recorded, but the rate of job creation softened to a fractional pace”.
Commenting on the Commonwealth Bank Flash PMI data, CBA Senior Economist, Gareth Aird said:
“An encouraging result thanks to a pickup in the services sector. There are early signs that the combination of rate cuts, tax rebates and rising dwelling prices is having a positive impact on the services sector.
“The divergence in the readings on the manufacturing and services sector is somewhat unusual, though not unprecedented. The dip in the manufacturing reading was a touch disappointing, particularly given the ongoing weakness in the Australian dollar. It may be the case that the raft of so-called geopolitical tensions are having a dampening impact on the local manufacturing sector. Overall, a move in the right direction, but the level of the headline index continues to imply that the economy could do with more stimulus. The case for fiscal easing through personal income tax cuts remains.”
