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Australia's Markit preliminary PMIs for September saw Manufacturing at 57.3 (prior 52.0) and Services off a 14-month low to 44.9 (prior 42.9) as continued lockdowns aimed to bring the COVID-19 situation under control dampened business conditions.

Australia PMI September 2021

 

Australia Markit preliminary (Flash) PMIs for September.

  • Flash Australia Composite Output Index Sep: 46.0, 3-month high (Aug final: 43.3)
  • Flash Australia Services Business Activity Index Sep: 44.9, 3-month high (Aug final: 42.9)
  • Flash Australia Manufacturing Output Index Sep: 53.3, 3-month high (Aug final: 45.7)
  • Flash Australia Manufacturing PMI Sep: 57.3, 3-month high (Aug final: 52.0)

Australia's private sector saw business activity decline for a third consecutive month in September, according to Flash PMI® data, though the rate of contraction eased to the slowest in the current sequence. Survey respondents reported that the slight easing of COVID-19 restrictions in September coupled with firms in the manufacturing sector being able to better adapt to ongoing disruptions enabled a slower drop in demand and output. This is while private sector employment levels returned to growth. Price pressures meanwhile intensified for private sector firms in September, although overall optimism among firms sustained.

The IHS Markit Flash Australia Composite Output Index* rose from 43.3 in August (final reading) to a three-month high of 46.0 in September but remained below the 50.0 no-change mark to signal a third straight month of contraction.

With COVID-19 lockdowns continuing to affect Australia into September, output and new orders remained in contraction for the third month running in September. This included foreign demand, though the speed of decline eased further from August with anecdotal evidence suggesting that some demand returned from the likes of the US, UK and Asia.

IHS Markit Flash Australia Services PMI®

The IHS Markit Flash Services Business Activity Index rose to 44.9 in September from a final reading of 42.9 in August. This marked a third consecutive month of service sector contraction, albeit at the slowest pace in the current sequence. Extensions of lockdown conditions for various Australian states through September continued to affect service sector performance. That said, some easing of mobility restrictions in the country enabled demand and activity to fall at slower rates in September. Service providers also increased their workforce levels amid optimism regarding the year ahead. Cost pressures however sustained for service sector firms with input cost inflation rising in September while output charges increased at the fastest rate seen since June’s survey record.

Australia PMI September 2021 Output by Sector

IHS Markit Flash Australia Manufacturing PMI®

The IHS Markit Flash Manufacturing PMI® rose from a final reading of 52.0 in August to 57.3 in September, printing a threemonth high. Output and new orders returned to growth after a brief month of contraction in August as manufacturers reported to have better adapted to ongoing COVID-19 conditions. Improved demand meanwhile drove firms to hire staff and acquire inputs at faster rates in September. That said, supply constraints simultaneously intensified with suppliers' delivery times having lengthened at the fastest pace since the April 2020 survey record. Shortages of inputs and delivery delays also led to increased price pressures for manufacturers as input price inflation accelerated to the fastest on record. Overall optimism amongst manufacturers nevertheless sustained in September, with business confidence having risen to the highest since June.

Australia PMI September 2021 Manufacturing

Jingyi Pan, Economics Associate Director at IHS Markit, said:

"The extension of COVID-19 restrictions into September continued to dampen business conditions in the Australian private sector, although the slight easing of restrictions was picked up in the latest IHS Markit Flash Australia Composite PMI, seeing the overall Composite Output Index contracting at a slower rate in September. This may also be suggesting that we are looking at early signs of a turning point.

"The employment index meanwhile pointed to higher workforce levels, which was a positive sign following the decline recorded in August, driven by the severe COVID-19 disruptions. "That said, price pressures intensified once again for Australian private sector firms while evidence of worsening supply constraints gathered, all of which remains a focal point for the Australian economy.""

Source: IHS Markit

From The TradersCommunity News Desk

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