Australia Services Sector Contracts in May

2026-06-02 23:10 By Joshua Ferrer 1 min. read

The S&P Global Australia Services PMI Business Activity Index fell to 48.7 in May 2026 from 50.7 in April, revised slightly higher from initial estimates of a 47.7 contraction but marked the second decline in activity in the past three months.

The downturn was driven by weaker demand, market uncertainty, and rising fuel costs linked to the ongoing Middle East conflict, which weighed on business conditions across several industries.

New business declined for a third straight month and at the fastest pace in nearly two-and-a-half years, as higher prices and rising interest rates dampened demand.

Export orders also fell, while companies reduced staffing levels for the first time since January 2025 amid softer workloads.

Inflationary pressures remained elevated, with fuel costs continuing to push up input prices and prompting firms to pass higher expenses on to customers through increased selling prices.

Meanwhile, business confidence weakened to its lowest level since November 2023.



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Australia Services Sector Contracts in May
The S&P Global Australia Services PMI Business Activity Index fell to 48.7 in May 2026 from 50.7 in April, revised slightly higher from initial estimates of a 47.7 contraction but marked the second decline in activity in the past three months. The downturn was driven by weaker demand, market uncertainty, and rising fuel costs linked to the ongoing Middle East conflict, which weighed on business conditions across several industries. New business declined for a third straight month and at the fastest pace in nearly two-and-a-half years, as higher prices and rising interest rates dampened demand. Export orders also fell, while companies reduced staffing levels for the first time since January 2025 amid softer workloads. Inflationary pressures remained elevated, with fuel costs continuing to push up input prices and prompting firms to pass higher expenses on to customers through increased selling prices. Meanwhile, business confidence weakened to its lowest level since November 2023.
2026-06-02
Australia Services Sector Marks Second Drop in Three Months
The S&P Global Australia Services PMI Business Activity Index fell to 47.7 in May 2026 from a final 50.7 in the previous month, preliminary estimates showed. The reading marked the second contraction in three months for the services sector, as the ongoing Middle East conflict continued to disrupt business conditions and weigh on demand. Activity also fell below the sector’s long-run growth trend, with new orders declining solidly amid a weaker demand environment. In response, firms returned to workforce cutbacks after prior signs of stabilization. On the inflation front, cost pressures intensified further, although the pace of increase remained considerably softer than in the manufacturing sector.
2026-05-20
Australia Services Sector Growth Revised Higher
The S&P Global Australia Services PMI Business Activity Index was revised slightly higher to 50.7 in April 2026 from 50.3 in the preliminary estimate, and up from a final 46.3 in March, which had marked the weakest reading since November 2023. A rebound in services activity was supported by sustained job creation, with firms reporting improved business conditions. However, new orders continued to fall as demand remained subdued amid higher fuel costs due to the war in the Middle East. Despite weak demand, new business from abroad ticked higher, with growth in April following a sharp decline in March. On prices, input cost inflation accelerated to the fastest pace since August 2022, driven by fuel price fluctuations. As a result, firms raised selling prices at the fastest rate since January 2023, as higher fuel costs were passed through to customers. Finally, business sentiment was unchanged from that seen in March, remaining relatively muted compared to the long-run average.
2026-05-04