The manufacturing sector in Australia continued to contract in May, as indicated by the latest survey from Judo Bank, which reported a manufacturing PMI of 49.6. This figure is unchanged from April and remains below the 50-point threshold that separates expansion from contraction.
Production levels decreased for the eighteenth consecutive month, driven by a reduction in new orders. However, the rate of decline for both output and new orders slowed to the lowest levels in eight and fifteen months, respectively, and were marginal overall. Notably, new export orders increased for the first time since November 2022.
The survey also highlighted a slight decrease in the services PMI, which eased to 53.1 in May, down from 53.6 in April.
Growth in new business within the services sector continued, bolstered by rising client interest and an expanding customer base for Australian service providers, including new business from international clients. This overall growth supported an expansion in service activity and staffing levels.
Meanwhile, the composite PMI fell to 52.6 in May from 53.0 in April.
Business activity growth was primarily driven by the service sector's expansion. However, the pace of the manufacturing output decline also slowed for the third consecutive month to a rate not seen since September 2023.
