(RTTNews) - The manufacturing sector in Australia continued to contract in December, albeit it a slightly slower pace, the latest survey from Judo Bank revealed with a manufacturing PMI score of 47.8.
That's up marginally from 47.7 in November, although it remained beneath the boom-or-bust line of 50 that separates expansion from contraction.
Manufacturing output contracted at a quicker pace in the final month of the year despite a slower fall in incoming new orders. Both the rates of contraction for output and new orders remained solid amid softening economic conditions and pressure from high interest rates.
Consequently, headcounts in the manufacturing sector declined for a second consecutive month while firms also cut input purchasing, leading to further paring of input inventory stock.
The services PMI also moved higher, to 47.6 from 46.0 in November.
Soft demand conditions weighed on services activity with anecdotal evidence pointing to high inflation and borrowing costs negatively affecting client spending. In turn, service providers continued to work through their outstanding business, extending the depletion of backlogged work to one-and-a-half years.
The composite index rose to 47.4 in December from 46.2 in November.
Underpinning the sustained decline in private sector activity was subdued demand conditions. Incoming new orders fell for a third straight month and across both the manufacturing and service sectors. A tenth consecutive monthly reduction in new export business was also observed.
