The mining-driven economy got slammed as soon as its emerging market export partners like China slowed down.
And despite a pick up in China, Australia has yet to see the benefits.
It's "a credit bubble built on a commodity market built on an even bigger Chinese credit bubble," wrote strategist Dylan Grice in a note last year.
Earlier today, we got another round of ugly economic stats via the Australian Industry Group's January PMI report.
Its manufacturing
Any reading below 50 signals contraction.
Here's a breakdown of the sub-indices. As you can see, exports are particularly horrific:
Here's a historical look at headline PMI:
Here are the key points (verbatim) from the latest report:
- Manufacturing activity contracted for an 11th consecutive month in January, with the seasonally adjusted Australian Industry Group Australian Performance of Manufacturing Index (Australian PMI®) recording a level of 40.2, down from 44.3 one month ago. (Readings below 50 indicate a contraction in activity with the distance from 50 indicative of the strength of the decrease).
- The contraction in manufacturing new orders worsened, reflecting weak global demand and a softening Australian economy. The new orders sub-index fell 6.3 points to 39.4 in January.
- The manufacturing production sub-index remained firmly in the red, at 40.4 in January, down by 2.1 points from December.
- Only the wood & paper products sub-sector expanded in January, while the contraction in the other sub-sectors, except petroleum, coal, chemical and rubber products, eased.
- Survey respondents remained cautious about the outlook. They cited a range of inhibitors including: soft demand; weak confidence; and the strong Australian dollar.
- Wages and input costs continued to rise in January, while the decline in selling prices persisted, indicating that the profits for manufacturers remain under pressure.