The S&P Global Australia Manufacturing PMI slipped below the 50.0 no‑change threshold to 49.8 in March 2026, down from 51.0 in February, marking the first deterioration in manufacturing sector conditions in five months. This reading signaled that the sector moved into contraction territory, with business conditions weakening slightly at the close of the first quarter.
New domestic orders declined for the first time in five months, driving a second consecutive marginal drop in output. Employment, which had previously been growing, swung into a clear contraction amid limited capacity pressures, while inventory levels fell at the fastest pace in months. Business confidence also weakened sharply.
At the same time, supply conditions deteriorated markedly in March. The war in the Middle East exacerbated inflationary pressures, resulting in the steepest rise in input costs in three and a half years.
