The paranoia comes in with the NAPM s Non-Manufacturing Business Activity Index. This index rose by 1.6 per centage from 50.1 per cent in January to 51.7 per cent in February. But this always happens as recessions unfold. Austrian never tire of pointing out that manufacturing gets belted first and hardest followed by industries close to the point of consumption that get off comparatively lightly. The list underlines my point, with the exception of mining.
Figures show that mining has expanded even thought manufacturing has contracted.
This is not necessarily a contradiction. In other words, that part of mining output that might have been lost to manufacturing may have been offset elsewhere. In Australia, for example, nearly all of the mining industry s output is for export. Readers might recall that manufacturing, especially in the higher stages, is the first to be hit by rising costs. Now the purchasing power index rose in January by 1.1 per cent, and as the NAPM s Prices Index shows manufacturing is still being squeezed by rising costs, though the rate of increase has fallen.