The S&P Global Australia Composite PMI declined to 52.4 in February from 55.7 in January, according to final data. While the latest reading signaled a seventeenth consecutive month of expansion in private sector activity, it also indicated a loss of momentum compared with the start of the year. The slowdown was largely driven by a renewed contraction in manufacturing output and a moderation in the pace of services sector growth.
Consistent with this softer performance, both total new orders and export orders continued to rise in February, but at slower rates. Business optimism also deteriorated. Despite this, employment increased at a faster pace as capacity pressures persisted, enabling firms to work through existing backlogs.
Inflationary pressures strengthened in February, with overall price growth accelerating, led primarily by higher services inflation. Even with ongoing expansion, business confidence weakened, dropping to its lowest level since September 2024.
