A welcome (and huge) jump for the services PMI as Australia’s two largest population states of New South Wales (capital is Sydney) and Victoria (Melbourne) consolidated reopening and restrictions were dialled back further.
IHS Markit, comments – highlighting the (globally) familiar themes of input shortages (supply chain disruption) and price rises:
- “Demand and output both returned to growth, boding well for hiring activity in February. That said, shortages of input materials and labour persisted as issues for private sector firms. This led to input prices continuing to increase sharply while selling price inflation hit a record according to the latest PMI survey. While this perhaps comes as no surprise in the initial recovery phase from the latest COVID-19 wave, the lingering impact on overall inflation and wages will have to be closely followed.
- “Business confidence amongst private sector firms improved once again in February after briefly dipping in January, reflecting the short-lived nature of the latest COVID-19 wave, which was a positive sign.”