The S&P Global Australia Manufacturing PMI declined to 50.1 in March 2026 from 51.0 in February, according to flash estimates, indicating that the sector is close to stagnation. The slowdown reflected a marginal drop in output and the first decline in new orders since July 2024, even as export demand grew at its fastest pace in more than three and a half years.
Manufacturers reported a loss of momentum, coinciding with the first contraction in private sector output in eighteen months. While firms remained optimistic about output over the year ahead, confidence slipped to a 20‑month low amid worries over fragile demand and potential supply chain disruptions stemming from the war in the Middle East.
Companies cut staff numbers, with manufacturing employment posting its steepest round of job losses since October 2024, and backlogs of work shrinking for the first time this year. Input costs rose at the quickest rate in three and a half years, while output price inflation accelerated to its highest level since August 2023.
