7/28/2019 Pmi Report June 2013 Final

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JAPANESEPMI

EurozoNEPMI

u

SAISMP

MI

AuSt

rAlIANPMI

CHINESEPM

I

JuNE 2013

MANuFACturING NuDGEStoWArDS GroWtH IN JuNEKEy FINDINGS The latest seasonally adjusted Australian Industry Group

Australian Perormance o Manuacturing Index (AustralianPMI) rose 5.8 points to 49.6 in June. At just 0.4 points below

the 50-point mark that separates contraction rom expansion, imaintained at this level, this will signal that the manuacturingsector is stabilising, ater two years o continuous contraction.

June 2013 saw the highest level or the Australian PMI since June

2011, which was the last time the Index moved above 50 points. The Australian PMI sub-indexes or production and inventories

indicated mild expansion in June, with readings above 50 points.

New orders and supplier deliveries were neutral, while capacityutilisation moved back over 70%.

Exports continue to struggle, with the exports sub-index only

partially recovering rom its recent record lows. At just 30.3points, the exports sub-index continues to signal extremely tough

exporting conditions, despite the all in the Australian dollar.

Although exports continue to suer, the solid improvement inthe Australian PMI since May and especially April might already

be relecting the beneits o the all in the Australian dollar or

those who compete against imports. Some survey respondentsnoted a stronger pick-up in local orders, over and above the usual

end-o-inancial-year rush.

The beneits o the most recent cash rate cuts might also beiltering through, although survey respondents noted that local

demand and conidence remain weak.

SECtorS In three-month moving average terms (3MMA, which lessens

the volatility inherent in these detailed monthly data), ive o

the eight sub-sectors improved in June relative to May. They

included: textiles, clothing ootwear and other manuacturing;printing and recorded media; petroleum, coal, chemicals and

rubber products; non-metallic mineral products; and machinery

and equipment. All sub-sector indexes remained below 50 points on a 3MMA

basis, due to the extreme weakness o their perormance in the

preceding two months. Sub-sectors that deteriorated in June (on a 3MMA basis)

included the large sub-sectors o ood and beverage products

and metal products, as well as the smaller wood and paperproducts sub-sector.

ProDuCtIoN AND CAPACItyutIlISAtIoN The production sub-index in the Australian PMI rose by 4.1

points to 50.2 points in May (seasonally adjusted). At just above50 points, this indicates a stabilisation in production levels

rather than outright recovery or growth. Although mild, this

expansion in production is the irst since March 2012 (50.1points) and its highest reading since November 2011 (50.7).

Sub-sectors with a stable production index reading in June

(around 50 points in unadjusted terms) included: ood andbeverages production and petroleum coal, chemicals and

rubber production.

Capacity utilisation or the manuacturing sector edged up to70.1% in June (unadjusted), ater alling in April and May to

levels similar to those recorded during the global inancial crisis

in 2009. It remains below the average rate o capacity utilisationsince 2010 (72.8%). This spare capacity is likely to continue

to limit the incentives or capital investment over the rest o

this year.

Capac

ityUtilisation(%)

Production

DiffusionIndex(Points)

Capacity Utilisation

Production

20

25

30

35

40

45

50

55

60

65

70

60

65

70

75

80

Jun10

Sep10

Dec10

Mar11

Jun11

Sep11

Dec11

Mar12

Jun12

Sep12

Dec12

Mar13

June13

Food, beverage & tobaccoproducts

Textiles, clothing & othermanufacturing

Wood & paper products

Printing & recorded media

Petroleum, coal, chemical &rubber products

Non-metallic mineral products

Metal products

Machinery & equipment

Australian PMI

3 month moving average

0 10 20 30 40 50 60 70 80 90 100

IncreasingDecreasing

Diffusion Index May 13 June 13

20

25

30

35

40

45

50

55

60

3 month moving averageAustralian PMI

Increasing

Decreasing

DiffusionIndex(Points)

Jun10

Sep10

Dec10

Mar11

Jun11

Sep11

Dec11

Mar12

Jun12

Sep12

Dec12

Mar13

June13

49.6

JUNE

MAY30

35

40

45

50

55

60

65

49.0

MAY

APR

MAY

APR

MAY

APR

MAY

APR

30

35

40

45

50

55

60

65

48.3

30

35

40

45

50

55

60

65

51.5

30

35

40

45

50

55

60

65

49.2

30

35

40

45

50

55

60

65

7/28/2019 Pmi Report June 2013 Final

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AuStrAlIAN PMI

urther Information Results are based on responses rom around 200 companies rom a rotating sample o manuacturers. An evaluation o the Australian PMI as well asther economic research and analysis can be obtained rom the Ai Group website at http://www.aigroup.com.au/economics.esults or capacity utilisation, average wages and output prices to June 2007 based on quarterly surveys. From this point data will be collected in the monthly PMI survey.* Number o months moving in current direction.ew monthly seasonal adjustment factors were applied in April 2013.ew industry classification applied from December 2012 (and back-dated) based on the ANZSIC 2006 coding system and 2011-12 weights.isit http://www.aigroup.com.au/economics for further economic analysis and information.

WHAt IS tHE

AuStrAlIAN PMI?

The Australian Industry Group

Australian Perormance

o Manuacturing Index

(Australian PMI) is a seasonally

adjusted national composite

index based on the diusion

indices or production, new

orders, deliveries, inventories

and employment with varying

weights. An Australian PMI

reading above 50 points

indicates that manuacturing

is generally expanding; below50, that it is declining. The

distance rom 50 is indicative o

the strength o the expansion

or decline. Survey results are

based on a rotating sample

o manuacturing companies

each month.

More inormation can be

obtained rom the Ai Group

website www.aigroup.com.au.

CoNtACt

Innes Willox

Chie Executive

Ai Group

Tel 03 9867 0111

INtErNAtIoNAl

PMI DAtA

Markit Economics

www.markiteconomics.com

CIPS Australia

www.cipsa.com.au

The Australian Industry Group, 2013

This publication is copyright. Apart

rom any air dealing or the

purposes o private study orresearch permitted under applicable

copyright legislation, no part may be

reproduced by any process or means

without the prior written permission

o The Australian Industry Group.

Disclaimer The Australian Industry

Group provides inormation services

to its members and others, which

include economic and industry

policy and orecasting services.

None o the inormation provided

here is represented or implied to

be legal, accounting, fnancial or

investment advice and does not

constitute fnancial product advice.

The Australian Industry Group does

not invite and does not expect

any person to act or rely on any

statement, opinion, representation or

intererence expressed or implied in

this publication. All readers must make

their own enquiries and obtain their

own proessional advice in relation

to any issue or matter reerred to

herein beore making any fnancial or

other decision. The Australian Industry

Group accepts no responsibility or any

act or omission by any person relying

in whole or in part upon the contents

o this publication.AIG13175

June 2013 May 2013 Monthly Change Direction Rate of Change Trend** (Months)

AuStrAlIAN PMI 49.6 43.8 5.8 Contracting Slower 24

ProDuCtIoN 50.2 46.1 4.1 Expanding - 1

EMPloyMENt 46.9 46.6 0.3 Contracting Slower 20

NEW orDErS 49.9 42.3 7.6 Contracting Slower 10

NvENtorIES 52.9 44.3 8.6 Expanding - 1

SuPPlIEr DElIvErIES 49.6 38.9 10.7 Contracting Slower 16

NPut PrICES 56.4 54.7 1.7 Expanding Faster 133

ExPortS 30.3 28.5 1.8 Contracting Slower 11

SEllING PrICES* 44.8 41.4 3.4 Contracting Slower 27AvErAGE WAGES* 53.8 52.9 0.9 Expanding Faster 50APACIty utIlISAtIoN (%)* 70.1 68.9 1.2 Increase - -

NEW orDErS AND ExPortS The new orders sub-index in the Australian PMI jumped by

another 7.6 points to 49.9 in June (seasonally adjusted), taking itup 17.5 points in just two months. Comments rom respondents

point to the recently lower dollar as providing a much-needed

support to local orders. Last minute end-o-year orders alsoboosted June.

New orders were strongest in ood and beverages production and

were also up in textiles, clothing and other manuacturing andstable in petroleum coal, chemicals and rubber production. Other

sub-sectors showed contractions in new orders, with the metal

products sub-sector showing the weakest new orders index. The recent exchange rate depreciation is yet to low through

into a recovery in exports, with the exports sub-index rising just

1.8 points to 30.3. This indicates manuacturing exports are still

deteriorating, albeit at a slower rate.

EMPloyMENt AND AvErAGE WAGES The employment sub-index in the Australian PMI improved

marginally in June, rising just 0.3 points to 46.9 points (seasonally

adjusted). This index remains at around its recent (mildly

contractionary) average level. Employment sub-index levels remain lowest in the metal

products; and printing and recorded media sub-sectors.

Employment numbers stabilised in ood and beveragesproduction and appear to have expanded in the smaller wood

and paper products and non-metallic products sub-sectors.

Wages growth strengthened again in June (to 53.8 points rom52.9 in May, unadjusted), although the general trend through

2013 has been toward moderating wage pressures across

manuacturing, in line with soter labour demand.

FINISHED StoCKS AND DElIvErIES Manuacturing inventories expanded in June, with the inished

stocks sub-index rising a solid 8.6 points to 52.9 (seasonallyadjusted). This was the irst rise in inventories since March,

ollowing alls in April and May.

Stocks expanded sharply in the non-metallic products and woodand paper products sub-sectors (unadjusted), possibly indicating

an unexpected build-up. Metal products and printing and

recorded media continued to reduce their stocks. The supplier deliveries sub-index shot up by 10.7 points to 49.6

points (seasonally adjusted), its strongest level since February

2012 (52.3 points). Supplier deliveries grew in the ood and beverages, printing

and recorded media and non-metallic minerals sub-sectors but

continued to decline elsewhere.

NPut CoStS AND SEllING PrICES Input costs ticked up in June, with the input costs sub-index rising

1.7 points to 56.4 points (seasonally adjusted). The general trend

in 2013 has been toward moderating input price pressures, in line

with soter commodity prices and demand. Selling prices ell or the 27th consecutive month, with the

average selling price index recording 44.8 points, a similar level

to the average or 2012 and 2013 to date. This ongoing gap between (mildly) rising input costs and alling

selling prices is indicative o the widespread price discounting

in the manuacturing sector, as businesses seek to competeglobally in a very weak demand environment. This is putting

intense pressure on proit margins and businesses ability to grow

and invest.

Jun10

Sep10

Dec10

Mar11

Jun11

Sep11

Dec11

Mar12

Jun12

Sep12

Dec12

Mar13

June13

Increasing

Decreasing

Diffusion

Index(Points)

Exports New Orders

65

60

55

50

45

40

35

30

25

20

15

DiffusionIndex(Points)

Average Wages

Employment

20

25

30

35

40

45

50

55

60

65

70

75

J

un10

S

ep10

D

ec10

M

ar11

J

un11

S

ep11

D

ec11

M

ar12

J

un12

S

ep12

D

ec12

M

ar13

Ju

ne13

Increasing

Decreasing

Increasing

Decreasing

DiffusionIndex(Points)

30

35

40

45

50

55

60

65

Jun10

Sep10

Dec10

Mar11

Jun11

Sep11

Dec11

Mar12

Jun12

Sep12

Dec12

Mar13

June13

D el iv er ies F in ished S tocks

Input prices Sel l ing prices

Increasing

DecreasingD

iffusionIndex(Points)

20

30

40

50

60

70

80

90

Jun

10

Sep

10

Dec

10

Mar

11

Jun

11

Sep

11

Dec

11

Mar

12

Jun

12

Sep

12

Dec

12

Mar

13

June

13

easonally adjusted, *except where indicated.