Manufacturing Activity Contracting, Price Pressures Low

The final Judo Bank manufacturing PMI for May was revised up to 48.4 from 48 in the preliminary release. Given it was the revision of a second-tier release, there was no market reaction. The final tends to be revised up from the preliminary. The index continues to point to a contraction in manufacturing output but the more important services component prints on June 5, which has been above 50 since April.

• Input cost inflation rose slightly in May due to raw material, labour and transport costs, but remained below average. These higher costs were passed onto customers at a faster rate but still close to a 2.5 year low.
• New orders continued to contract and as a result job growth slowed. But business confidence improved.