I posted in my quick recap after the HSBC flash release that: If there’s a bright spot, I cant see it:

Westpac, though, reckons it ain’t all bad and have kindly pointed out the brighter aspects:

  • This survey has some positive forward looking aspects balancing the weaker headline and coincident activity indicators
  • New orders to inventories ratio improved noticeably, despite the headline moving in the adverse direction
  • New export orders … the June read of 44.9 was close to disastrous… (but) .. rebound to 47.7 puts this index back on the modestly declining trend line established earlier in the year, with June now looking like an outlier
  • We note with interest that finished goods inventories fell sharply (48.6 from 50.7 in June), while “purchases quantities” have levelled out just below 50. So a de-stocking phase of finished output is underway, and the re-stocking of inputs observed earlier in the year has concluded
  • In April the overall impression was one of a manufacturing sector that was expanding, albeit modestly, with an OK domestic order book and a poor external equivalent. The May survey necessitated a downgrading of that assessment. June was a major backward step. July has the weakest headline since August 2012, but more promising detail than its most immediate predecessors.

On the other hand:

The majority of activity sub-indices shifted adversely, including total orders, employment, production, work backlogs