2020.04.2305:15:00UTC+00Australia's Private Sector Contraction Intensifies In April

Australia's private sector contracted at a much stronger pace in April with severe fall reported by service providers due to the coronavirus, or COVID-19 pandemic, flash survey data from the IHS Markit showed Thursday.

The Commonwealth Bank composite output index fell to 22.4 in April from 39.4 in March. A score below 50 indicates contraction.

Company shutdowns, government restrictions and steep falls in customer demand contributed to the overall reduction in activity. New orders fell substantially and staffing decreased at the sharpest rate in four-year survey so far.

Despite the severity of the current downturn, companies hope that business will return to normal over the coming year.

The flash services Purchasing Managers' Index plunged to 19.6 in April from 38.5 in the previous month.

At the same time, the flash manufacturing PMI dropped to 45.6 from 49.7 a month ago. Commonwealth Bank Head of Australian Economics, Gareth Aird said the extent to which the PMIs rebound will be dictated in large part by the duration of the enforced shutdown.