S&P Global data shows business activity nearing stabilization but weak demand and sentiment signal potential growth risks ahead.
Australia’s flash composite PMI climbed to 49.8 in June from 48.7 in May, edging closer to the 50 mark that separates expansion from contraction. The reading suggests a near-stabilization in business activity, though new orders declined for the fourth straight month, highlighting persistent demand weakness.
The index remains below the no-change threshold, with prior months showing similar subdued activity. Business confidence plunged to its lowest level since the COVID-19 pandemic, excluding March 2020, reflecting concerns over deteriorating economic conditions rather than recovery.
Input and output price pressures eased, offering some relief to the Reserve Bank of Australia. However, the divergence between hiring trends and falling orders raises concerns about the sustainability of employment gains, a potential late-cycle warning sign.