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Services Sector Passed Higher Costs On In July

AUSTRALIA DATA
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The Judo Bank preliminary July PMIs suggest that the economy barely grew at the start of Q3 with services growth mildly positive but manufacturing continuing to contract. The composite and services PMIs were at 6-month lows of 50.2 and 50.8 respectively. The RBA has been concerned about services inflation and the PMI is likely to add to this as higher costs were passed on.

  • The Q2 average PMI was slightly stronger on the quarter at 52.4 suggesting that growth should improve but the July reading is tentatively signalling that it will be short lived. But Judo Bank notes that July was too early to capture the positive effects from tax cuts and other fiscal stimulus.
Australia Judo Bank PMI services vs GDP q/q%

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The Judo Bank preliminary July PMIs suggest that the economy barely grew at the start of Q3 with services growth mildly positive but manufacturing continuing to contract. The composite and services PMIs were at 6-month lows of 50.2 and 50.8 respectively. The RBA has been concerned about services inflation and the PMI is likely to add to this as higher costs were passed on.

  • The Q2 average PMI was slightly stronger on the quarter at 52.4 suggesting that growth should improve but the July reading is tentatively signalling that it will be short lived. But Judo Bank notes that July was too early to capture the positive effects from tax cuts and other fiscal stimulus.
Australia Judo Bank PMI services vs GDP q/q%

Keep reading...Show less