New orders contracted at the fastest pace in two and a half years, pushing the index below 50 for the first time since late 2024.
Australia’s services Purchasing Managers’ Index dropped to 48.7 in May from 50.7 in April, signaling contraction as new orders fell at the sharpest rate in two and a half years. Employment in the sector also declined for the first time since late 2024, adding to signs of cooling economic activity.
The decline follows a period of modest expansion, with the April reading of 50.7 marking the weakest growth in six months. Analysts had expected a slight dip but not a contraction, highlighting unexpected softness in domestic demand.
The data precedes Australia’s GDP release on June 3, 2026, with markets watching for broader economic implications amid global trade tensions and commodity price volatility.