Close X Cookies are necessary for the proper functioning of 24hGold.com. By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
EnglishFrench
Gold & Silver Prices in

Australia Manufacturing Collapses as Commodity Supercycle Stalls; Labor and Unions Wrecked Australia

IMG Auteur
Published : May 04th, 2013
733 words - Reading time : 1 - 2 minutes
( 1 vote, 5/5 )
Print article
  Article Comments Comment this article Rating All Articles  
0
Send
0
comment
Our Newsletter...
Category : Crisis Watch

Australia fundamentals deteriorate rapidly as evidenced by a collapse in the PMI Manufacturing Index in April.

Key Findings

  • Manufacturing activity contracted significantly in April as conditions weakened amid a strong Australian dollar, intense import competition, high energy costs and weak local confidence.
  • The Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) fell 7.7 points to 36.7 on a seasonally adjusted basis. (Readings below 50 indicate a contraction in activity with the distance from 50 indicative of the strength of the decrease.)
  • This is the lowest level the Australian PMI® has recorded since May 2009, with many of the key sub-indexes also dropping to levels not seen since 2009. The three-month moving average in April fell to 42.2 points from 43.4 points in March.
  • Contractions in activity were recorded in seven out of the eight manufacturing sub-sectors. Significant contractions were recorded in food, beverage & tobacco products; printing & recorded media; non-metallic mineral products; metal products; and machinery & equipment.
  • Sharp declines in production, new orders and employment were recorded in April, while finished stocks and deliveries declined as well, albeit at a more moderate pace.
  • Capacity utilization in the manufacturing sector fell 2.4 points to 68.6 (the lowest level since June 2009), consistent with the overall drop in activity in the sector.
  • Exports continued to contract for the ninth consecutive month, as the exports sub-index fell to 24.5 in April. This was the lowest reading in the history of this sub-index (commencing in 2004).
  • Significant contractions in manufacturing activity were recorded across most States, especially in Victoria where the record of activity fell 8.4 points to 29.1 in April, the lowest level on record.

New Orders

The new orders sub-index decreased by 7.0 points to 32.4 points in April (seasonally adjusted). This was the lowest level recorded for this sub-index since May 2009.

Employment

The seasonally adjusted employment sub-index decreased by 9.4 points to 39.3 in April, the lowest level since May 2009.

Inventories

Manufacturing inventories contracted again in April, with the sub-index falling 4.8 points to 46.4 (seasonally adjusted). The deliveries sub-index declined 7.3 points to 41.1, indicating that deliveries have been contracting since March 2012.
Australia PMI at a Glance

Series DataApr IndexMar IndexPercentage Point ChangeDirectionRate of ChangeTrend (Months)
PMI™44.436.7-7.7ContractingFaster22
Production41.733.1-8.6ContractingFaster13
Employment48.739.3-9.4ContractingFaster18
New Orders39.432.4-7.0ContractingFaster8
Inventories51.246.4-4.8ContractingFrom Expanding1
Supplier Deliveries48.441.1-7.3ContractingFaster14
Input Prices65.557.0-8.5ExpandingSlower131
Exports27.424.5-2.9ContractingFaster9
Selling Prices43.040.3-2.7ContractingFaster25
Average Wages57.757.0-0.7ExpandingSlower48
Capacity Utilization71.068.6-2.4Decrease



Macro Alert From Steen Jakobsen

Via email, Steen Jakobsen at Saxo Bank sent these comments ...
Macro Alert: Australia is seeing significant slow-down.

  1. Australia's benefit from the Super Cycle in commodities is petering out in 2013. Mining investment to GDP will peak at 8%. This concept is supported by the RBA. 
  2. There are significant reductions in pipeline projects due to lower general level of commodity prices and cancellations. 
  3. The non-mining economy is weaker and getting weaker
  4. China slow-down hits Australia
Massive Imbalances

Please note the massive imbalances in the PMI report. Input prices have been expanding for 131 straight months. Wages have been expanding for 48 months. Selling prices have been contracting for 25 months.

New orders and exports tell the story. Wages are too high. Margin pressures mount. Employment must drop and it did. The employment index was down a monstrous 9.4 points.

Labor and Unions Wrecked Australia

The labor party and unions wrecked Australia. This was invisible for years because a housing boom and China-fueled commodity boom masked the untenable nature of wage and property bubble growth.

Now, it's payback time.

On September 14, prime minister Julia Gillard, leader of the Australian Labor Party will be thrown out of office in a landslide. Unfortunately, it will take years for Australia to recover from the damage caused by Labor.

Addendum - Comments from Steve Keen

Steve Keen blames both parties.

Via email, Keen says "The damage began under Labor with Hawke and Keating, was turbocharged by the Liberals under Howard, and simply maintained by Rudd/Gillard Labor. And unions have lost significant power all the way through--they've been bystanders, not active participants. It's instead been a series of distortions caused by a neoliberal philosophy that is shared by both parties."

Hmm. Parties talk differently but act the same. Where have we seen that before?

In the US, it's on war, bailouts, and spending that always goes up. Romneycare and Obamacare were the same. For political purposes people pretend differences exist when they don't, except on some social issues.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Data and Statistics for these countries : Australia | China | All
Gold and Silver Prices for these countries : Australia | China | All
<< Previous article
Rate :Average :5 (1 vote)
>> Next article
IMG Auteur
Mish 13 abonnés
Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. He writes a global economics blog which has commentary 5-7 times a week. He also writes for the Daily Reckoning, Whiskey & Gunpowder, and has over 80 magazine and book cover credits. Visit http://www.sitkapacific.com
WebsiteSubscribe to his services
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
Latest Comments
Gold: April 2015 Update
07:51overtheedge
"I have been invited to speak at the Mines & Money Mauritius Conference in June 2015 again. If you would like to join you can receive 25% off your ...
Greece Needs the Magic Formula t...
07:28overtheedge
Wow dude. "Idiocracy" is obviously not just another dumb-ass movie. I admit that I should have recognized your devotion to Brawndo (it has ...
The Finanser Interviews Jon Matonis
29 Marovertheedge
"In late 2009, I got introduced to Bitcoin by a random email from Satoshi Nakamoto. I didn’t give it much thought at the time and then 3-4 months ...
Gold Effect on Mining & Shale Wa...
27 Maruser4779-1
A jumbled and rambling article, seasoned with hyperbolic rant, but redeemed by interesting information. So 3/5. A good editor could turn this into ...
Oil Surges, Gold and Silver Spik...
26 Marovertheedge
"That a country would choose to directly intervene militarily in the affairs of another country is a dangerous precedent, ..." Precedent?<...
Water Wars Loom Over California ...
26 Marovertheedge
Ellen Brown should stick to what she understands versus geology, hydrology and financially available technology. Example: "With discussions...
Kicked to the Curb
24 MarFalconflight2
I'm both ashamed and disgusted by the government 'of, by, and for the people,' every bit as much as I am ashamed and disgusted by the People.
The Silver:Gold Ratio, 1687-2011
24 Marconey1
"large new deposits of silver were found"? So what was found by ECB that enabled them to cough up an extra trillion euros for failing European econ...
Most commented articlesFavoritesMore...
World PM Newsflow
ALL
GOLD
SILVER
PGM & DIAMONDS
OIL & GAS
OTHER METALS
Mining Company News
Pele Mountain Res.(Ag-Au-Cu)GEM.V
Executes MOU with Major Chinese Rare Earth Player to Pursue Opportunities of Developing Rare
CA$ 0.04+50.00%Trend Power :
Corporate news
Duran Ventures(Ag-Au-Cu)DRV.V
Signs Memorandum of Understanding for Tolling Operation in Peru
CA$ 0.01+0.00%Trend Power :
Corporate news
Metanor(Au-Pa-Pl)MTO.V
Intersects 8.64 g/T Over 5.8 Meters at Bachelor Mine
CA$ 0.04-11.11%Trend Power :
Corporate news
Focus VenturesFCV.V
Completes 70% Purchase of JPQ, Owner of Bayovar 12 Phosphate Project, Peru
CA$ 0.24+0.00%Trend Power :
Corporate news
Coral Gold(Ag-Au)CLH.V
Announces Barrick Drill Results from 2014 Gold Ridge Property Exploration Program, Nevada
CA$ 0.13-18.75%Trend Power :
Corporate news
North Arrow MineralsNAR.V
Discovers Three New Kimberlites at the Pikoo Diamond Project, Saskatchewan
CA$ 0.83+0.00%Trend Power :
Corporate news
Orvana Min.(Cu-Au-Ag)ORV.TO
Announces Appointment of New Chief Executive Officer
CA$ 0.39+4.00%Trend Power :
Nominations
Denison Mines(Ur)DML.TO
Intersects New Zone of Uranium Mineralization at Wheeler River
CA$ 1.01-0.98%Trend Power :
Corporate news
Rockwell(Cu-Gems-Ni)RDI.TO
sells non-core Tirisano Project for a cash consideration of $6.3 million and provides an upda
CA$ 0.24+4.35%Trend Power :
Corporate news
Claude Resources(Au-Cu-Ngas)CRJ.TO
Hits Record Annual Gold Production and Generates 2014 Net Profit of $4.6 Million
CA$ 0.58-4.92%Trend Power :
Corporate news
Comments closed
Subscribe to 24hGold’s daily market briefing
  • Prices and data of precious metals in 119 currencies and world mining companies
  • Daily analysis of the economy, markets and more
  • Free, daily and indispensable
Stay informed, subscribe now !
* Your email will never be shared.