Australia’s Westpac Chamber Actual Composite index rose to 56.1 in December from 52.9 in September compared to a level of 61.5 in June and confirms that activity has lost momentum, points out the research team at Westpac.
Key Quotes
“Conditions have moderated to be at levels prevailing in 2015.”
“These recent softer updates for the Composite were evident across the sub-components. Employment, new orders, output, backlog and overtime have all eased back to more modest levels. This is consistent with the loss of momentum in the broader economy.”
“Annual GDP growth was just 1.7%yr in the September quarter, moderating from 3.2% in mid-2018, and is heavily reliant on public spending and net exports. Private demand declined by 0.4% over the past year due to a contraction in business and dwelling investment, while consumption growth was soft at 1.2% – the slowest pace since the GFC.”
“As with the economy overall, conditions in the manufacturing industry are mixed across the different sectors. Most notably, the downturn in construction, in particular residential works, has weighed heavily on metals manufacturers. Against this, the Australian dollar is performing its role as an economic shock-absorber. Looking ahead, recent policy stimulus will help to cushion the economy, but the outlook remains uncertain with consumers exercising caution around spending decisions.”
“The survey’s Labour Market Composite, which broadly tracks economy-wide employment growth, is at 48.7. The index correctly led the uplift in employment in 2017 and identified the turning point to slower momentum in 2018. The last two surveys have shown the Composite moving another notch lower, consistent with the further softening of employment growth seen so far in the second half of 2019.”
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