FX.co ★ Australia Manufacturing Expansion Slows in May

The S&P Global Australia Manufacturing PMI dipped to 51 in May 2025, down from 51.7 in April, marking a consecutive monthly decline and hitting its lowest point since February. This slowdown was mainly attributed to a less vigorous increase in new orders, despite a rebound in export demand. Production output decreased over the month, witnessing only the second contraction this year. This weaker output was further evidenced by a reduction in input inventories, as companies scaled back purchasing activities due to ongoing delivery delays. However, despite the drop in output, business confidence saw an upswing. Manufacturers expressed heightened optimism regarding future sales, pointing to business development strategies and increasing economic and trade stability. Staffing levels increased for the third month in a row as companies geared up for anticipated growth. In terms of pricing, there was a moderation in selling price inflation, and input cost inflation slowed to its lowest rate in six months.