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2 Mar 2015
Australia's AIG PMI shows third month of contraction
FXStreet (Bali) - Australia's AIG Performance of Manufacturing index for February came at 45.4 vs 49, representing a three consecutive months of contraction.
Comments from Ai Group Chief Executive, Innes Willox
"While there are bright patches, most notably for food & beverages and producers of building materials, weak domestic demand from businesses and households is offsetting the boost that many domestic manufacturers might have expected to flow from the weaker Australian dollar."
"Particular drivers of flat domestic demand include the sharp drop in mining construction; the progressive closure of automotive assembly; and weak local business investment. The lower dollar has also lifted the prices paid for imported inputs, putting additional pressure on manufacturers' margins."
"On the positive side, the lower dollar and its further depreciation since September 2014 have boosted manufacturing export volumes over recent months."
"The weakness of domestic demand certainly provides further backing for the Reserve Bank's decision in February to reduce interest rates and it underlines the importance of using the May Budget to provide a boost to domestic activity - including by delivering on the commitment to cut the company tax rate to 28.5 per cent for all companies."
Comments from Ai Group Chief Executive, Innes Willox
"While there are bright patches, most notably for food & beverages and producers of building materials, weak domestic demand from businesses and households is offsetting the boost that many domestic manufacturers might have expected to flow from the weaker Australian dollar."
"Particular drivers of flat domestic demand include the sharp drop in mining construction; the progressive closure of automotive assembly; and weak local business investment. The lower dollar has also lifted the prices paid for imported inputs, putting additional pressure on manufacturers' margins."
"On the positive side, the lower dollar and its further depreciation since September 2014 have boosted manufacturing export volumes over recent months."
"The weakness of domestic demand certainly provides further backing for the Reserve Bank's decision in February to reduce interest rates and it underlines the importance of using the May Budget to provide a boost to domestic activity - including by delivering on the commitment to cut the company tax rate to 28.5 per cent for all companies."