PMI

The Judo Bank Australia Manufacturing PMI, or Purchasing Managers' Index, is a monthly factory survey sponsored by Judo Bank, compiled by S&P Global. It surveys purchasing managers and executives at around 400 private manufacturers, stratified to mirror sector output and company size. It is a diffusion index, a 0 to 100 gauge of how widespread month to month change is, not its size.

It does not measure absolute levels or volumes of output, GDP, industrial production, or sales. It also excludes services, tracked by the separate Services Business Activity Index. Readings above 50 signal broad expansion from the prior month, readings below 50 signal broad contraction, and 50 means no change.

Responses are collected in the second half of each month and compare mid month to mid month. They show the direction of change versus the prior month. The final index appears on the first business day of the next month at 09:00 Sydney time, and all dates are provisional. A flash estimate, an early cut using 80% to 85% of responses, appears about one week earlier at 09:00, which the final then supersedes.

Each release details the five headline sub-indices plus the rest. Services and composite releases follow days later on the releases site, republished by Judo Bank. Company responses stay fixed after first publication, while seasonal factors and dates can change.

The headline moves with five weighted parts covering demand, output, jobs, supply chains, and stocks.

• New Orders, 30%: captures incoming demand and new business placed with manufacturers.
• Output, 25%: captures production volumes.
• Employment, 20%: captures staffing levels on a full-time-equivalent basis, excluding seasonal hiring.
• Suppliers' Delivery Times, 15%: captures vendor performance and supply-chain speed, inverted to move with the others.
• Stocks of Purchases, 10%: captures input inventories held by manufacturers.

In the September 2024 cycle the flash was 46.7 after 48.5 in August. The final, published on October 1, 2024, matched the flash with no revision. It marked eight months in contraction and the weakest result outside the pandemic since the survey began in May 2016.

New orders and output fell at their fastest pace since May 2020. Export orders fell sharply as factories cut staffing and purchases, and input stocks shrank at their second fastest pace since 2016. Output prices cooled to their lowest since January 2021 even as input costs stayed elevated, while overall employment held at 50.8.

1. Response weighting: Each reply of higher, same or lower is weighted by its sector and company size share of gross value added.
2. Diffusion index: For each variable, the index equals the % reporting higher plus half the % reporting the same, on a 0 to 100 scale. For example, 30% higher, 50% same and 20% lower gives 30 plus 25, or 55.0.
3. Inversion: The Suppliers' Delivery Times index is inverted as 100 minus its value so it moves with the others.
4. Headline average: The headline equals 30% New Orders plus 25% Output plus 20% Employment plus 15% inverted delivery times plus 10% input stocks.
5. Seasonal adjustment: Sub indices are seasonally adjusted using X-12 ARIMA and an in-house method. The published headline is this adjusted composite, whose adjustment factors can change while company responses stay fixed.
6. Worked example: Take New Orders at 55.0, Output at 52.0, Employment at 48.0, inverted delivery times at 55.0 and input stocks at 50.0. The math gives 52.4, modest expansion even though the 48.0 jobs part contracts.