Australia Manufacturing PMI Slips To 55.3 In January - Markit

(RTTNews) - The manufacturing sector in Australia continued to expand in January, albeit at a slower rate, the latest survey from Markit Economics revealed on Monday with a manufacturing PMI score of 55.3.

That's down from 57.7 in December, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

New order growth eased at the start of the year while manufacturing output slipped into contraction for the first time in five months. Although demand persisted in growth, Australian manufacturers reported a slowdown in production, affected by the shortages of inputs, labor constraints and other COVID-19 disruptions.

Suppliers' delivery times lengthened at a more severe rate, implicated by the worsening of COVID-19 conditions. This led to firms ramping up their input purchases with intentions of safety stock building. Meanwhile hiring activities decelerated with panelists reporting difficulties in securing labor.

The survey also showed that the services PMI tumbled to 45.0 from 55.1 in December, while the composite PMI dropped to 45.3 from 54.9.

Amid the surge in COVID-19 infections in Australia, both services demand and activity declined at the start of the year. New export orders slipped at a sharper rate in tandem.

Employment levels similarly fell in January, albeit marginally. Anecdotal evidence suggested that both COVID-19 disruptions and hiring difficulties contributed to the drop.