Manufacturing
- the preliminary for this was 57.9
- the prior, i.e. for March, was 57.7
Commentary from the report:
- “Australia’s manufacturing sector continued to expand at a strong pace according to the latest S&P Global Australia Manufacturing PMI, recovering from the latest COVID-19 Omicron wave. Business confidence also improved at the start of the second quarter, which was a positive sign for the near-term outlook and was reflected in higher buying activity and employment.
- “That said, supply and capacity issues were prominent as seen through the record rise in backlogged work, coupled with the lengthening of lead times and rising prices. These will be issues worthy of continued monitoring given their potential to limit future output.”
The remark on constraints is not new, but the impacts do seem to be deepening given the " record rise in backlogged work". Until constraints ease this is a source of further inflation, at the margin.
Further from the report, this on inflation pressure:
- On prices, both input costs and output charges continued to climb in April with the rate of output price inflation accelerating to a fresh record. Australian manufacturers reported facing higher input costs on the back of both the Ukraine war and China lockdowns, thereby sharing these cost burdens with their clients.
There is nothing at all the Reserve Bank of Australia can do about rising costs from the Ukraine war and China lockdowns. This will not stop them from hiking the cash rate, likely tomorrow.
Earlier:
Australia - AiG Manufacturing PMI for April 58.5 (prior 55.7)
RBA cash rate - lift off is coming, likely at the Tuesday 3 May 2022 meeting
