Morning business round-up: Australian economy shrinks

In the UK, the PMI figures indicated that the country’s manufacturing sector had grown at its weakest pace in almost two years in May.

In corporate news, Toyota has said its production in Japan is likely to return to normal levels faster than expected.

A company spokesman told the BBC that output at its domestic factories is expected to recover to 90% of pre-quake levels as early as this month.

Strong revenue growth in the US has helped building and heating materials group Wolseley to report a rise in trading profits, despite seeing a “subdued” residential UK construction sector.

Trading profits for the three months to the end of April rose 30% to £131m, with a 10% growth in like-for-like revenue in the US helping to offset “weaker trends in the UK”.

Insurance group Axa is selling its Canadian unit to Intact Financial for $2.7bn, and has outlined a five-year plan to raise earnings and reduce debt.

In the UK, there are concerns over the fate of care home firm Southern Cross.

The business, which looks after 31,000 people, has said it will be paying 30% less rent to its landlords over the next four months.

For a wider look at the world of business you can download the Business Daily podcast, which today looks at whether the IMF been too ready to bail out Europe.