The Performance of Manufacturing Index (PMI) continues to trend upwards, lifting from 53.2 to 53.9 in April. This is the fourth consecutive month above 50 and is further evidence the sector has turned the corner.
In April, the PMI new orders index lifted to 51.4, back above the breakeven 50 mark. While new orders are no longer going backwards, they also haven’t picked up in a meaningful way.
The PMI employment index nudged up to 55.0 in April, consistent with a rapidly expanding workforce. This strength is yet to materialise in official labour market statistics, where the number of jobs in manufacturing is still 2.5% below year earlier levels.
Since August, the Reserve Bank has cut the Official Cash Rate (OCR) by 200 basis points from 5.50% to 3.50%. Both the reductions to date, and the expectation for further cuts, will be providing support to the sector.
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