FX.co ★ Australia Services Activity Set for Sharpest Expansion Since Early 2022

The S&P Global Flash Australia Services PMI Business Activity Index climbed to 56.0 in January, up from 51.1 in December, signifying the most rapid expansion in the services sector since early 2022, pending confirmation. This acceleration was driven by increased service activity and quicker growth in new business as customer demand improved. Meanwhile, employment also rose as firms hired to manage workloads, though the overall pace of job growth slowed compared to December. Export demand conditions saw improvements alongside stronger external demand, contributing to a rise in new work inflows. However, business confidence waned from December, reflecting increased uncertainty despite the resilience in activity conditions. On the cost front, input price inflation eased compared to the previous month, and selling price inflation softened as pressures on service sector charges moderated.