Australia Services Contract More Than Initially Expected

2026-04-07 01:41 By Kyrie Dichosa 1 min. read

The S&P Global Australia Services PMI Business Activity Index fell to 46.3 in March 2026, larger than initial estimates of a 46.6 contraction, down from 52.8 in February.

This marked the first contraction in 26 months and the sharpest decline since November 2023, reflecting weaker business activity and new orders, with firms citing turbulent international conditions and the war in the Middle East as key factors.

Activity fell in four of five sectors, while new export orders dropped at a solid pace, ending a seven-month growth streak.

Meanwhile, employment continued to rise, as firms expanded staffing for future projects, reducing backlogs for the first time in three months.

On prices, rising fuel costs pushed operating expenses to the fastest rate since January 2023, with output price inflation reaching a 38-month high.

Despite the contraction, companies remained cautiously optimistic about future growth, though overall business confidence slipped to a 28-month low.



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