Australia Composite PMI Signals Modest Recovery

Australia's composite PMI was revised up to 50.4 in June 2026 from the flash estimate of 49.8, rebounding from May's 48.7 to signal a marginal expansion in private-sector business activity. The upturn was driven by a renewed growth in the services sector, while manufacturing output continued to fall, albeit at a slower pace. Higher staffing levels helped firms increase output despite a further drop in new orders, suggesting businesses relied on existing capacity and backlogs to sustain activity. On the price front, input cost inflation remained elevated but eased from the previous month, indicating some moderation in cost pressures. At the same time, output price inflation slowed sharply, with selling prices rising at the weakest pace since January, reflecting weaker pricing power amid subdued demand. Finally, confidence deteriorated for a second consecutive month, falling to its lowest level since November 2023 as firms remained cautious over the economic outlook and future demand.

Australia's composite PMI rose to 49.8 in June 2026 from a final 48.7 in May, flash estimates showed. The result signaled that private-sector activity was near stabilisation after a drop in the prior month. Services activity was broadly unchanged, while factory output continued to fall at a pace little changed from May. Employment grew after its first fall in nearly 1-1/2 years, although firms continued to reduce outstanding work, with backlogs falling at the fastest pace in just over 2-1/2 years. New orders shrank for a fourth month amid market uncertainty and global turbulence, while foreign sales also weakened. On the price front, input costs continued to rise sharply, though inflation eased for a second straight month to its slowest since March. Firms also raised selling prices at the weakest pace since February. Finally, confidence hit its lowest since March 2020 and, excluding the pandemic period, the weakest since the survey began, reflecting concerns over the economic outlook.

Australia’s composite PMI was revised higher to 48.7 in May 2026 from 47.8 in the preliminary estimate, but remained below the final reading of 50.7 in April. It marked the second contraction in three months as services and manufacturing activity weakened amid the prolonged Middle East conflict. Services activity contracted for the second time in three months, while manufacturing growth eased, with output declining for a fourth straight month. Total new orders dropped at the steepest pace in just under two and a half years, underscoring softer demand amid the Middle East war. Employment also fell for the first time in 17 months, with job losses the sharpest in nearly five years. Input costs rose due to higher fuel prices, although inflation eased from April. Selling price inflation also slowed from April's 39-month high. Lastly, sentiment slumped to its lowest level since November 2023 amid concerns surrounding a broader economic downturn, higher prices, and rising interest rates.