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Early indicators show virus has hit business

By Grace Ormsby · March 25 2020
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Invest

Early indicators show virus has hit business

By Grace Ormsby
March 25 2020
Reading:
egg
egg
Early indicators show virus has hit business

Early indicators show virus has hit business

author image
By Grace Ormsby · March 25 2020
Reading:
egg
egg
Early indicators show virus has hit business

There’s been a sharp upswing of negative impact on Australian business that can be blamed on COVID-19, according to new data.

The most recent Commonwealth Bank ‘Flash’ Purchasing Manager Index (PMI) has revealed just how quickly certain sectors in the Australian business community have felt the wrath of the coronavirus pandemic.

For the bank’s chief economist, Michael Blythe, the sharp deterioration underlines “the increasing impact of the coronavirus on the Australian economy”.

He said, “The services sector is being hit hard by the cancellation of events, general fears about social interaction and a very sharp decline in offshore demand as travel restrictions bite.”

For the month of March, it was also reported that coronavirus contributed to the fastest fall in manufacturing since the survey began nearly four years ago.

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At the same time, some manufacturers did manage to expand their output due to a lack of goods coming from China.

Mr Blythe commented that while the manufacturing sector is faring a little better, “the leading indicators are flashing warning signs”.

“The deterioration in supplier delivery times is accelerating, highlighting the disruption to supply. And the lower Aussie dollar is pushing input prices for manufacturers up at a rapid rate,” he continued.

Commonwealth Bank noted that the Flash Composite Output Index was down to 40.7 from 49.0 in February – readings below 50.0 signal a deterioration in activity from the month before.

The Flash Services Output Index fell to just 39.8 from February’s 49.0, while the Flash manufacturing Output Index fell from 50.1 from 50.2 in February.

Early indicators show virus has hit business
Early indicators show virus has hit business
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About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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About the author

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

Join The Nest Egg community

We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians

Your email address will be shared with nestegg and subject to our Privacy Policy

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