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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.
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.
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.
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