Flash composite PMI fell to 47.8, marking the second contraction in three months amid a sharp decline in new orders.
Australia’s flash composite PMI slumped to 47.8 in May from 50.4 in April, signaling a renewed contraction in private sector activity. The decline was driven by the fastest drop in new orders since September 2021, with businesses citing uncertainty linked to the Middle East conflict.
The services sector led the downturn, with activity falling to 47.7 from 50.7, while manufacturing PMI eased to 50.2. Employment also declined for the first time since late 2024, and input price inflation remained elevated despite easing slightly from April.
Business sentiment matched its lowest level since the survey began, equaling the reading at the start of the COVID-19 pandemic in March 2020. Supply chain disruptions from the Middle East continued to pressure manufacturing costs.