Australia Manufacturing Growth Eases in May

The S&P Global Australia Manufacturing PMI declined to 50.3 in May 2026 from 51.3 in April, preliminary data showed. The decline came as output contracted for the fourth consecutive month. On prices, input prices continued to fall, while output prices increased.

The S&P Global Australia Manufacturing PMI stood at 51.3 in April 2026, higher than flash data of 51.0 and March's reading of 49.8. However, the latest result largely reflected a substantial lengthening of delivery times due to the war in the Middle East and delays in international freight, rather than stronger underlying demand. Firms lifted purchasing and rebuilt inventories for the first time in seven months, signaling precautionary stockpiling. Meanwhile, output fell at the steepest pace in 16 months, and new orders declined again as exports slipped for the first time in four months. Employment contracted for a second month, with backlogs and finished goods inventories shrinking further. Input costs surged at the fastest rate since March 2022 due to higher fuel prices, while output price inflation accelerated to near-record levels. Lastly, business mood weakened for a third month, hitting its lowest since July 2024 under persistent geopolitical risks and mounting cost pressures.

The S&P Global Australia Manufacturing PMI increased to 51.0 in April 2026 from a final 49.8 in the previous month, according to preliminary data. The latest result indicated a return to expansion, with output continuing to decline but at a slower pace. Meanwhile, new orders, employment, and inventories all edged lower at modest rates, pointing to still-fragile demand. Supply chains came under renewed strain amid disruptions linked to the Middle East conflict, with supplier delivery times lengthening at the sharpest pace since mid-2022 due to delays across key shipping routes. At the same time, higher fuel and freight costs drove input cost inflation to its highest level in nearly four years, adding pressure on manufacturers’ margins.