Australia's Judo Bank January Manufacturing PMI climbs to 50.1 from 47.6

The Australian Judo Bank Manufacturing Purchasing Managers' Index (PMI) for January showed business growth eked out a crawl of 50.1 MoM, stepping up from December's 47.6 as Australia heads further into a soft landing economic scenario.

The seasonally-adjusted Manufacturing PMI saw a slight revision from the preliminary 50.3 that was previously posted, but the figure remains in positive territory above the key 50.0 level.

Broadly softer economic conditions in Australia have led to a general slowdown in business activity, including new business orders, including exports.

According to Warren Hogan, Chief Economic Advisor at Judo Bank:

While manufacturing activity was much weaker than service sector activity in late 2023, the jump in output and new orders in January has eased concerns that a manufacturing sector recession was developing. Business confidence also improved among manufacturers in January, with the future output index reaching its highest level since last August.

About the Australian Judo Bank Manufacturing PMI

The Manufacturing Purchasing Managers Index (PMI), released on a monthly basis by Judo Bank and S&P Global, is a leading indicator gauging business activity in Australia’s manufacturing sector. The data is derived from surveys of senior executives at private-sector companies. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), industrial production, employment and inflation. The index varies between 0 and 100, with levels of 50.0 signaling no change over the previous month. A reading above 50 indicates that the manufacturing economy is generally expanding, a bullish sign for the Australian Dollar (AUD). Meanwhile, a reading below 50 signals that activity among goods producers is generally declining, which is seen as bearish for AUD.