Australia's Private Sector Expands the Most in 45 Months

The S&P Global Australia Composite PMI rose to 55.7 in January from 51.0 in December, final data showed. The reading marked the sixteenth consecutive month of expansion and signaled the strongest pace of growth in 45 months. Faster growth in both manufacturing output and services activity contributed to the sharp acceleration. In line with this, overall new orders rose at the fastest pace since April 2022, supported by strong demand across sectors. Job creation remained solid, allowing firms to continue addressing rising backlogged orders. Rates of input cost and output price inflation softened from December, pointing to easing price pressures. Despite the stronger activity backdrop, business confidence weakened and fell to the lowest level since October 2024.

The S&P Global Flash Australia Composite PMI rose to 55.5 in January from 51.0 in December, signaling expansion for a sixteenth month and hitting its joint-highest level since April 2022 matched by August 2025. Services activity accelerated with the Services Business Activity Index at 56.0 versus 51.1, while the Manufacturing PMI rose to 52.4 from 51.6 as goods and services new business both increased, with renewed overseas new orders for manufactured goods helping to drive the fastest expansion in overall new export orders in three-and-a-half years. Business sentiment remained positive and employment continued to rise as firms hired to manage workloads, although the overall rate of jobs growth softened versus December and outstanding workloads rose marginally for the first time in nine months. Input cost inflation and selling price inflation softened from December, though rising manufacturing input prices were flagged as a risk for inflation to intensify again.

The S&P Global Australia Composite PMI fell to 51 in December from 52.6 in November, final data showed. fell to 51 in December from 52.6 in November, final data showed. The reading marked the fifteenth consecutive month of expansion, though the pace of growth was the softest in seven months. Slower growth in both manufacturing production and services activity contributed to the moderation. In contrast, overall new orders rose at a faster pace, supported largely by a stronger upturn in the service sector. Job creation accelerated, enabling firms to reduce backlogged orders once again. Rates of input cost and output price inflation were slightly higher than in November, reflecting ongoing price pressures. Despite the moderation, business confidence improved, underpinning optimism for continued growth into the new year.