The S&P Global Australia Services PMI Business Activity Index eased to 52.8 in February from 56.3 in January, according to final data, but continued to signal a solid expansion in services activity that has now extended to just over two years. The softer reading reflected a moderation in both activity and new business growth. New orders rose at a slower yet still robust pace, supported by new product launches and an expanding customer base.
Employment increased at the fastest rate in nearly three years as firms expanded headcounts to manage ongoing workloads. Nonetheless, capacity remained under pressure, contributing to a further buildup in backlogs. External demand also improved, although the rise in new export business was more modest than in January.
Business confidence weakened in February, with firms citing concerns over the broader economic outlook and intensifying competition. On the cost front, input price inflation picked up, driven by higher labour and utility expenses. In turn, selling price inflation also accelerated, reaching a six-month high.
