S&P Global Manufacturing PMI Flash

What is Judo Bank Australia Manufacturing PMI Flash?

The Judo Bank Australia Manufacturing PMI (Purchasing Managers' Index) tracks factory direction using about 400 manufacturers chosen by sector and size. Its Flash is the early estimate in the Flash Australia Composite (combined factory plus services) release, compiled by S&P Global with Judo Bank as partner. Each index shows only direction of change from the prior month, not output volumes, levels, or GDP (total economic output). It covers manufacturing only, not services, mining, or construction, and it is separate from the Ai Group survey.

When is it released and what happens each release?

Responses are collected in the 2nd half of each month, with the flash using about 80 to 90% of replies. The flash appears in the reference month and the final on the 1st working day of the next month, both released at 09:00 Sydney time. Each flash release covers manufacturing PMI plus factory output, services activity, and combined output, while the final adds orders, employment, prices, and expectations. Unadjusted replies are never revised, seasonal factors (normal seasonal corrections) can revise the series, the final supersedes the flash, and markets read levels against 50.

What moves Judo Bank Australia Manufacturing PMI Flash?

The headline (main number) blends 5 survey parts, so shifts in demand, output, jobs, supply chains, or input stocks move it.

• New Orders, 30%: captures demand inflow including foreign demand.
• Output, 25%: captures change in production volumes.
• Employment, 20%: captures change in workforce capacity and hiring.
• Suppliers' Delivery Times, 15%: captures supply strain through changes in delivery waiting times, inverted in calculation.
• Stocks of Purchases, 10%: captures stored input materials before production.

The final for May 2023, published 1 June 2023, reached 48.4, up from 48.0 in April. It was a 3rd straight sub-50 reading at a softer pace. Delivery times shortened at the fastest pace since collection began in May 2016, and faster deliveries lower the headline because that component is inverted. Backlogs cleared at the quickest pace in 3 years on weak demand, and hiring was the weakest in over two-and-a-half years.

Production fell for a 6th straight month and new orders stayed weak, yet firms still added workers at a marginal pace. Input costs stayed well below the series average and selling prices sat near a two-and-a-half-year low. This shows sub-50 reads breadth of direction, not output levels.

How is Judo Bank Australia Manufacturing PMI Flash calculated?

1. Diffusion index (breadth score): for each variable, score H plus half of U. Here H is % reporting higher and U is % reporting no change. Scores run 0 to 100.
2. Seasonal adjustment (normal seasonal correction): adjust each diffusion index to remove normal seasonal patterns.
3. Weighted headline (main number average): combine the 5 adjusted indices by weight into 1 headline number. Use 0.30 for New Orders, 0.25 for Output, 0.20 for Employment, 0.15 for Delivery Times, and 0.10 for Stocks of Purchases.
4. Inversion (direction flip): invert Delivery Times so slower deliveries raise the index and faster deliveries lower it.
5. Illustrative example (invented inputs): suppose New Orders is 48.0, Output is 46.0, and Employment is 51.0. Add inverted Delivery Times at 44.0 and Stocks of Purchases at 47.0. Then PMI equals 14.40 plus 11.50 plus 10.20 plus 6.60 plus 4.70, or 47.4, a deterioration since it is below 50.

Key point: Faster deliveries do not signal strength: they lower the PMI because weak demand shortens waits. Each index shows only prior-month direction, not output levels, and the 80 to 90% flash is only an early signal that the final supersedes.