Australia’s private sector has deteriorated even further, with its composite output index showing a reading of 47.5 in the last month of 2022, according to data released by S&P Global and Judo Bank Australia.
The latest Judo Bank Australia Composite PMI result marks a decline from November’s 48.0 and signals a third consecutive contraction in private sector output.
Furthermore, business activity further declined in services while manufacturing output contracted for the first time in 11 months, according to PMI data.
December 2022 also saw shrinking demand across both manufacturing and services sectors caused by a decline in economic conditions in a higher interest rate environment.
Meanwhile, workforce expansion continued across the private sector, albeit at a slower pace.
Judo Bank’s report also found that the fall in demand reversed some of the inflationary pressures faced by Australian service providers, with input cost inflation softening to its lowest since November 2021. Firms also passed on these cost increases at a weaker rate, the report added.
Overall business sentiment improved marginally to end the year, but confidence among business leaders remained historically subdued.
Composite PMI indices analysed in the report are weighted averages of comparable manufacturing and services PMI indices. Wights reflect the relative size of the manufacturing service sectors according to official GDP data.
