FX.co ★ Australia Private Sector Shrinks for First Time in 1½ Years

The S&P Global Australia Composite PMI declined to 46.6 in March, below the flash estimate of 47 and down from 52.4 in February, signaling the first contraction in private sector activity in 18 months. The downturn was driven by a renewed and notably sharp decline in services activity, accompanied by a modest decrease in manufacturing output. Both overall new orders and total production weakened, while price pressures strengthened: input costs and output charges rose to their highest levels in 39 and 31 months, respectively. Despite the loss of momentum, employment continued to grow, with firms retaining staff to handle existing workloads. Business confidence, however, deteriorated, slipping to its weakest point since July 2024 amid ongoing uncertainty about the economic outlook and persistent inflationary pressures.