Private sector growth slowed for a third month while input price inflation accelerated, signaling margin pressures for firms.
Australia’s flash Composite PMI fell to 52.5 in August from 53.2 in July, extending a three-month expansion but at a slower pace. The decline was driven by a contraction in manufacturing output, which slipped to 49.7, while services activity eased to 52.9.
Input price inflation reaccelerated for the first time in four months, led by rising fuel, freight, and raw material costs in manufacturing. Firms absorbed higher costs rather than passing them on fully, suggesting margin compression. New export orders rose, offering a counterbalance to weakening domestic demand.
Business confidence hit a six-month high, potentially encouraging firms to test pricing power if cost pressures persist. The data points to sustained but moderating growth amid tightening financial conditions.