S&P Global Manufacturing PMI

What is S&P Global Australia Manufacturing PMI?

The S&P Global Australia Manufacturing PMI (Purchasing Managers' Index) tracks the monthly direction of factory activity, not its size. S&P Global Market Intelligence compiles it with Judo Bank as local sponsor, within the PMI survey program. It surveys about 400 manufacturers on the direction of change versus the prior month. It is a diffusion index: above 50 means broad improvement, below means broad decline, and 50 means no change.

It does not measure output volumes, turnover, GDP, or price levels. It covers manufacturing only, not services, construction, or the whole economy. It is not the Australian Industry Group PMI, a separate local survey with its own panel and method.

When is it released and what happens each release?

Responses are collected in the second half of each month and record change versus the prior month. A flash reading comes about a week before month-end, and the final lands on the first business day after. Release is at 09:00 Sydney time, or 23:00 UTC the prior day.

The final reports the headline plus output, new orders, employment, stocks, and delivery times. It also reports backlogs, input and output prices, year-ahead expectations, and the sponsor bank economist's comment. The final need not match the flash, and underlying data are never revised, though seasonal factors sometimes are.

What moves S&P Global Australia Manufacturing PMI?

Five weighted parts drive the headline, alongside gauges tracked outside it.

• New Orders, 30%: inflow of new work, the largest headline driver.
• Output, 25%: production volumes versus the prior month.
• Employment, 20%: staffing and headcount levels.
• Suppliers' Delivery Times, 15%, inverted: vendor lead times, flipped so delays lift the index.
• Stocks of Purchases, 10%: stocks of bought-in inputs.
• Tracked outside the headline: new export orders, future output, backlogs, purchase quantities, finished-goods stocks, and input and output prices.

The September 2024 final, published October 1, 2024, read 46.7, matching the flash and down from 48.5 in August. It was the eighth straight month below 50 and the lowest since 2016 apart from the pandemic onset. Output and new orders sat far below 50, while employment averaged 47.9.

Input and output price strains had eased to pre-pandemic averages, yet margin pressure stayed strong. Delivery times stayed below pre-pandemic levels for a third month, and year-ahead expectations stayed upbeat yet below their pre-pandemic average.

How is S&P Global Australia Manufacturing PMI calculated?

1. Survey shares: Count shares reporting higher, unchanged, or lower versus the prior month.
2. Diffusion index: Add the higher share plus half the unchanged share, so DI = H + 0.5 x U, on a 0 to 100 scale. For example, 30% higher and 50% unchanged gives 55.0.
3. Seasonal adjustment: Adjust each diffusion index for seasonal effects.
4. Weighted headline: Combine the five parts with fixed weights, inverting delivery times first. That is 0.30 x orders + 0.25 x output + 0.20 x jobs + 0.15 x inverted delivery times + 0.10 x stocks. As an illustration, orders at 55.0, output at 52.0, jobs at 49.0, raw delivery times at 45.0 inverted to 55.0, and stocks at 51.0. These give 52.65, about 52.7, a broad expansion above 50.
5. Read vs 50: Above 50 means broad improvement on the prior month, 50 means no change, and below means broad decline.

Key point: 46.7 does not mean output fell 3.3% or sits at 46.7% of capacity. It means more reporters worsened than improved on the prior month. A rise below 50 still means contraction, only slower, and 50 is a monthly breadth line, not economic growth itself. Longer delivery delays lift the headline because that gauge is inverted.