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International
Australian Industry Index Remains Weak in May Due to Energy Crisis, Australian Industry Group Says
The Australian Industry Index remained weak in May largely due to the energy crisis, with the index down 1 point to -26.5 in seasonally adjusted terms, according to a report released by the Australian Industry Group on Wednesday.The energy crisis weighed heavily on new orders, declining 6.3 points to -34.6, with firms reporting delays in investments and looming uncertainty in the future path of energy markets.Input prices remained high at 63.1, but showed slight easing in May with a 6.4 point decline, while weaker sales price growth at 18.3 indicated limited pricing power.Additionally, wage growth increased by 6 points to 43.6, contributing to ongoing labor cost pressures.Metals manufacturing increased in response to supply disruptions, while other sectors faced weak conditions.Meanwhile, business services, which was previously less impacted by the energy crisis, experienced a downturn by 12 points in May, to be deeper in contraction at -33.3, its lowest result since February 2025.The Australian PMI was in contraction at -22.4, while the Australian PCI continued to rebound momentum in May, rising 9 points to -9.9.
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International
Japan's Private Sector Activity Slows in May, Final PMI Shows
Japanese private sector activity slowed in May, with a stagnation in the services sector, S&P Global showed Wednesday.The seasonally adjusted S&P Global Japan Composite PMI Output Index slipped to 51.1, compared with 52.2 from the previous month, and was in line with the flash estimate issued on May 21.The latest print also met the consensus estimate, according to Investing.com.Meanwhile, the services PMI slipped to a neutral reading of 50.0 in May, compared with 51.0 in April. It was in line with the consensus forecast of 50.0.On the manufacturing side, the PMI stood at 54.5, lower than the previous month's 51-month high of 55.1, and the consensus estimate of 54.5.
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International
Australia Services Activity Contracts in May as New Orders Fall at Fastest Rate in Almost Two and a Half Years, Says S&P
Australia's seasonally adjusted S&P Global Services purchasing managers' index (PMI) business activity index fell below the 50 no-change mark in May, posting 48.7 from 50.7 in April, according to a Wednesday report by S&P.Lower activity was seen in real estate and business services, transport and storage, and finance and insurance, while growth was maintained in consumer services and information and communication, it added.The report said that new export orders decreased for the second time in three months at a "solid" pace.Service providers signalled a solid and accelerated reduction in new business, with the latest contraction the sharpest in just under two-and-a-half years, while new business has now fallen in three successive months.The Composite Output Index posted 48.7 in May, down from 50.4 in April, signalling a renewed fall in private sector output in Australia.The report said the fall in output reflected the sharpest reduction in new orders since December 2023, while employment fell for the first time in 17 months, the report added.Input costs continued to increase rapidly, with the pace of output price inflation little-changed from the 44-month high posted in April, while business confidence dropped to a two and a half year low, the report added."Taken alongside the contraction in manufacturing output reported by the PMI earlier in the week, the latest data suggest that the Australian economy is going to struggle to generate any growth during the second quarter of the year," said Andrew Harker, Economics Director at S&P Global Market Intelligence.
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