Economics Resource Centre

Performance of Business Index - August 2020

Australian PBI®
Down 2.1 points
(seasonally adjusted)

42.6

Australian PBI®
Up 2.0 points
(trend)

39.5
 

Next Release: 7 October 2020

August 2020 - OVERVIEW

Business conditions slump again in August

The Australian Industry Group Australian Performance of Business Index (Australian PBI) fell by 2.1 points to 42.6 points in August (seasonally adjusted). This points to a further contraction in activity in August and at a faster pace than in July. It reflects the effects of renewed activity restrictions and border closures nationally, in response to the COVID-19 pandemic. Results below 50 points indicate deteriorating business conditions in the month, with lower numbers indicating a faster pace of deterioration.

This worsening slump in August comes after the Australian PBI recorded its lowest monthly result in April (27.2 points) and Australia experienced the worst contraction in GDP on record in Q2 2020 (-7.0% q/q and -6.3% p.a.).

Three of the four activity indices in the Australian PBI – production, employment and new orders - deteriorated again in August, indicating a steeper pace of decline than in July, but still an improvement on March through to June. The supplier deliveries index improved to a 'less bad' pace of decline in August, but some of this appears to be a catch-up in deliveries that were delayed in previous months. Capacity utilisation remains low.

 

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