The "flash" April PMI (formerly sponsored by the Commonwealth Bank of Australia, and now by Judo Bank) fell again. But the services PMI rose again. The business cycle is usually led by manufacturing/construction because inventory additions and draw-downs accentuate the cycle, whereas (obviously) services have no inventories (there's no inventory of unused haircuts, for example, though there is pent-up demand).
This is the chart for manufacturing (extreme-adjusted, as always):
This is the chart for services and manufacturing combined :
The chart below shows the relationship between the composite PMI and GDP. It's not perfect, but it suggests GDP could be stronger in Q1. Not necessarily a good thing; the RBA is looking for an excuse to raise rates. Does this mean Australia will avoid a recession? China is picking up even as the US and Europe slow. So .... maybe. :-)
No comments:
Post a Comment