Australia's Manufacturing PMI Shows Signs of Recovery

By James Glynn

SYDNEY--Activity across Australia's manufacturing sector improved strongly in April but it is too soon to call an end to a cyclical downswing in the sector seen over the last year.

The headline seasonally adjusted Judo Bank Australia Manufacturing Purchasing Managers Index rose to 49.6 in April, up from 47.3 in March.

While the data showed improvement, it indicated a third successive monthly deterioration in manufacturing-sector conditions, but at a marginal pace that was the lowest in the current sequence.

Rates of contraction for new orders and production both decelerated in April, while purchasing levels also declined at a softer pace, while inventory levels fell only moderately, the data showed.

"It is too early to call an end to the cyclical slowdown experienced by Australia's manufacturing sector over the past 12 months," said Warren Hogan, Chief Economic Advisor at Judo Bank.

"We have only seen one month with an expansionary reading in the last year, and since then the index has dipped lower again. We will need to see a number of months of stronger readings to be confident of a recovery in Australia's manufacturing sector," he added.

Hogan also noted that price indicators were up slightly in April, suggesting inflation remains a problem within the Australian economy in 2024.

Write to James Glynn at james.glynn@wsj.com