PMI Shows Weak Start To Q4, Selling Price Rises Moderating

The preliminary composite Judo Bank PMI for October returned into contractionary territory falling to 47.3 from 51.5, the lowest since January 2022. The weakness was driven by a cut in output driven by lower new orders and more pessimism re the outlook but employment continued to grow albeit more slowly. Services activity contracted with the index at 47.6 down from 51.8 and manufacturing shrank at a faster pace as the PMI deteriorated to 48 from 48.7.

• Survey respondents noted that higher rates, lower demand and price pressures drove the decline in new domestic business. Export orders also continued to decline.
• Input cost pressures rose to a 3-month high due to fuel and higher wages. While selling price inflation continued to rise, lower pricing power meant that it was at its lowest rate since March 2021.
• Both services and manufacturing sectors increased their work forces but more moderately than seen for most of 2023.
• Businesses remain positive regarding the outlook but less so than they have been with confidence falling to its lowest since the start of the pandemic and is below the series average.
• See Judo Bank PMI report here.

Source: MNI - Market News/Bloomberg