Australian PBI: Business conditions still negative in June
The Australian Industry Group Australian Performance of Business Index (Australian PBI) lifted by 1.8 points to 33.6 in June, pointing to a further contraction in activity in response to the COVID-19 pandemic but at a slightly slower pace than in May (results below 50 points in the Australian PBI indicate deteriorating business conditions, with lower numbers indicating a faster pace of deterioration in the month).
Business conditions remained negative across almost all sectors in June, with bright spots evident in food, grocery and medical manufacturing and related wholesaling. Some sectors are benefiting from easing of activity restrictions in some states of Australia.
Ai Group chief executive, Innes Willox, said: “Business activity contracted again in June, despite some easing of trading restrictions across Australia. Production and new orders improved but remained firmly in contraction while the decline in employment continued. This latest data suggests that the negative impact of COVID-19 activity restrictions on Australia’s manufacturing, services and construction industries will continue well into the second half of this calendar year. The pricing indices indicate that Australia experienced price deflation in the second quarter of 2020 as demand evaporated across the economy.”
The PBI new orders index rose by 2.6 points to 32.7 in June, indicating further falls in orders but at a slowing pace. Consumer-facing businesses in some locations are benefiting from lifting activity restrictions, with flow-on benefits to parts of wholesaling and manufacturing; other large industrial, commercial and professional sectors reported further declines in orders from regular customers and few new customers. The PBI supplier deliveries index remained at 32.6 points in June – its lowest level since 2009.