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Simon Murray, analyst at Westpac, points out that the Australia’s Westpac Chamber Actual Composite index declined in March to 61.7 from 63.0 in December and while the Composite remains at a positive level but has weakened over the past two quarters.

Key Quotes

“The reading for the Composite index is supported by rising output, overtime and backlog, but partly offset by new orders increasing at a slower pace and a flattening of employment. The Australian economy slowed significantly in the second half of 2018 to finish with below-trend growth of 2.3% through the year. That reflects weaker private demand, with public spending remaining a bright spot.”

“A number of components of the Survey are suggestive of an emerging slowdown. Assessments of the general business situation, new orders expectations and equipment investment intentions are all at or around lows back to 2015.”

“Manufacturing is benefitting from the public infrastructure boom and a relatively low Australian dollar is boosting international competitiveness. However, negative domestic factors are gaining more prominence of late.”

“The Expected Composite fell to 59.6 in March from 63.2 in December. March’s read is the softest result since early 2016.”

“The survey’s Labour Market Composite, which broadly tracks economy-wide employment growth is at 54.7. The index correctly led the uplift in employment in 2017 and identified the turning point to slower momentum in 2018. The current level suggests a continued moderate pace in the start of 2019.”