Australia’s manufacturing and service sectors showed marginal improvements in December, as indicated by the latest PMI data. PMI Manufacturing index inched up slightly from 47.7 to 47.8, while PMI Services index rose from 46.0 to 47.6. PMI Composite, which combines both manufacturing and services, also increased from 46.2 to 47.4. Despite these increases, all indices remained below 50.0 threshold that separates expansion from contraction, suggesting that both sectors are still facing challenges.
Warren Hogan, Chief Economic Advisor at Judo Bank, noted: “For the RBA and Treasury, these results are consistent with the soft landing view of the economic outlook. There are few signs that the economy is likely to tip into a steeper downturn next year.”
Hogan also emphasized the importance of the employment sector in this context: “Most importantly, the strong employment results suggest the economy may prove resilient in 2024. It is hard to see a sharp downturn in the economy while employment and incomes are expanding.”
