Australia Private Sector Recovers Slightly in April

Australia’s S&P Global Australia Composite PMI rose to 50.4 in April 2026, better than initial estimates of 50.1, signaling a slight return to growth following a first reduction for a year-and-a-half in the previous month at 46.6. The increase in output reflected growth in services business activity, climbing to 50.7 as sustained job creation supported output, while manufacturing production declined for a third straight month amid supply disruptions and weaker demand. New orders fell for a second consecutive month, reflecting uncertainty and rising fuel costs linked to the Middle East conflict, though services exports showed slight growth. Inflationary pressures intensified sharply, with input costs surging to multi-year highs, prompting firms to raise selling prices. Employment rose overall, supported by services hiring, but manufacturing firms cut jobs. Meanwhile, business confidence weakened to its lowest in nearly two years, as concerns over costs and demand persisted.

Australia’s S&P Global Australia Composite PMI rose to 50.1 in April 2026 from a final 46.6 in March, according to flash data, signaling a marginal return to growth. There was a rebound in services activity while manufacturing output shrank at a steeper rate, as firms grappled with disruptions linked to the Middle East conflict. Export orders continued to grow, but only modestly, helped by sales to North America, Asia, and New Zealand. However, total new business fell for a second straight month amid elevated client uncertainty. Employment growth picked up, allowing firms to make inroads into backlogged work. On the cost side, input price inflation accelerated for a third month, reaching its highest since August 2022, due to rising fuel and shipping costs. Part of this pressure was passed on to customers, with output price inflation reaching a 3-1/2-year high. Finally, business sentiment weakened to its lowest level in nearly 2-1/2 years, reflecting concerns over costs and demand.

The S&P Global Australia Composite PMI fell to 46.6 in March, worse than initial estimates of 47, down from 52.4 in February. This marked the first contraction in private sector activity in a year-and-a-half. The decline reflected a renewed and solid reduction in services activity, alongside a slight fall in manufacturing production. Overall new orders and output decreased, while inflationary pressures intensified, with input costs and output prices rising to 39- and 31-month highs, respectively. Despite the slowdown, employment continued to expand as firms maintained staffing levels to manage workloads. Business confidence weakened, falling to its lowest level since July 2024, amid uncertainty over economic conditions and persistent inflationary pressures.