(RTTNews) - The manufacturing sector in Australia continued to contract in June, and at a faster rate, the latest survey from Judo Bank revealed on Friday with a manufacturing PMI score of 47.5.
That's down from 49.7 in May and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction.
Pressure from high interest rates and softening market conditions resulted in new orders and production declining at quicker rates in June. That said, new export orders rose for a second straight month. Consequent of the reduction in new work inflows, Australian manufacturers lowered their inventory levels, while employment fell following a slight rise in May.
The survey also showed that the services PMI slower to 51.0 in June from 52.5 in May.
Services activity growth slowed in June on the back of a marginal reduction in new business. Anecdotal evidence suggested that softer economic conditions negatively affected demand for services. This included new export business, which fell for the first time since March. The rate of job creation thereby eased in June as capacity pressure reduced.
The composite index came in at 50.6 in May, down from 52.1 in May.
Business activity growth was again driven primarily by the service sector, while manufacturing output fell at a more pronounced pace compared to May. Firms reported working through their backlogs as incoming new orders declined across both the manufacturing and service sectors for the first time since January. Elevated interest rates and subdued economic conditions were often mentioned by survey panelists as reasons for the deterioration in demand.
