• The lastest flash PMI data from the Commonwealth Bank shows the economy is shrinking quickly.
• On a scale of 100, where any score below 50 shows a contraction, Australia scored just 22.4 in April.
• That’s sharply down from nearly 40 the previous month, indicating the “profound negative impact of the COVID-19 pandemic”, according to CBA head of Australian economics Gareth Aird.
• Visit Business Insider Australia’s homepage for more stories.

The Australian economy is deep into one hell of a contraction.

Not only is it well on its way to a recession, but the latest flash PMI data shows the rate at which the country is racing into one has only sped up in recent weeks.

PMI reflects how demand has changed within different sectors, with a score below 50 demonstrating an overall economic contraction. Australia’s PMI now sits at just 22.4, having “collapsed” in April by 17 points, according to the Commonwealth Bank head of Australian economics.

“The profound negative impact of the COVID‑19 pandemic on the Australian economy has been reflected in the incredible collapse in the CBA Flash Composite PMI over April,” Gareth Aird said in a note issued to Business Insider Australia. “Indeed the overall result is simply astonishing.”

The extraordinary score is reflective of the extraordinary effort to quash the COVID-19 outbreak, as Australia shuts down entire sectors, restricts the operation of businesses and the movement of individuals, and generally dampens consumer demand. What the data shows unsurprisingly is that those businesses that rely on close personal contact are reeling more than others.

“The services sector has been hit a lot harder than the manufacturing sector as evidenced by the disparity between the overall levels of the Manufacturing PMI [at] 45.6, compared to the Services PMI [of] 19.6,” Aird said.

The size of the contraction is sure to be felt most strongly in the eastern states, where the likes of New South Wales and Victoria rely heavily on a services industry that has been quickly shedding jobs.

It’s not to say manufacturing has come out unscathed. While falling wages and fuel prices have cut the cost of doing business for the service sector, countervailing winds have buffeted manufacturers.

“It was a different outcome for the manufacturing sector as input costs lifted due to the fall in the Aussie dollar and reported shortages of materials,” Aird said.

In sum, it’s shaping up to be a rough economic hibernation for Australia.

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