Australia Services Sector Growth Hits 6-Month High

The S&P Global Flash Australia Services PMI Business Activity Index increased to 53.0 in July 2026 from 50.5 in June, marking the strongest growth since January, preliminary estimates showed. It was the second consecutive month of expansion in the services sector, supported by higher output. At the same time, employment also increased. On the price front, input prices rose due to higher oil prices. As a result, firms raised selling prices, driven by strong demand. Looking ahead, business confidence remained positive, following its lowest reading since November 2023 in June.

The S&P Global Flash Australia Services PMI Business Activity Index was revised higher to 50.5 in June 2026 from the preliminary estimate of 49.9 and after a final reading of 48.7 in May. The latest reading indicated that the services sector returned to expansion, though it remained only slightly above the neutral 50.0 mark. The improvement was supported by a return to employment growth, signaling renewed job creation during the month. Staffing levels rose for the seventeenth time in the past 18 months, albeit modestly. However, new orders continued to decline for a fourth straight month amid market uncertainty, while export demand also weakened due to the impact of the Middle East conflict. On the price front, input prices rose due to higher fuel prices, although input price inflation eased for the second straight month. Meanwhile, output price inflation slowed to a five-month low due to competitive pressures. Finally, sentiment fell to its lowest level since November 2023.

The S&P Global Flash Australia Services PMI Business Activity Index rose to 49.9 in June 2026 from 48.7 in the previous month. The flash reading indicated that the services sector moved closer to stabilization but remained slightly in contraction territory. Nonetheless, the improvement helped lift the Composite Output Index to 49.8 from 48.7, signaling broadly stable private sector activity. However, new orders continued to decline for a fourth straight month amid market uncertainty, while export demand also weakened. Business confidence fell to its lowest level since the pandemic. Employment returned to growth, but firms reduced backlogs at the fastest pace in over two years. Meanwhile, input cost and selling price inflation eased further despite persistent fuel and transportation cost pressures.