FX.co ★ Australia’s Manufacturing Growth Slows in June

The S&P Global Australia Manufacturing PMI experienced a decline in June, dropping to 50.6 from 51.0 in May, marking the lowest point since February. This decline was primarily driven by a slight reduction in output as new orders decreased for the first time in five months, largely due to sufficient client inventories and weaker market conditions. Although the overall contraction in new orders was slight, there was a significant drop in export demand. Panelists attribute this decline to the adverse effects of U.S. trade policy on global demand for Australian goods. As a result of the subdued activity, purchasing volumes diminished for the second consecutive month, reflecting a hesitance to build inventory. Both pre-production and post-production inventories were reduced as goods producers adapted to the weakening demand. Despite the slowdown, employment levels rose, albeit at the slowest rate in four months, as companies hired staff to manage current workloads. The combination of increased labor capacity and fewer new orders contributed to a further significant reduction in backlogged work.