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Australian Private Sector Posts Second Consecutive Month of Growth as New Orders Reverse Decline

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Australian Private Sector Posts Second Consecutive Month of Growth as New Orders Reverse Decline

Australia's private sector grew for the second straight month in July, buoyed by its first increase in new orders in five months amid a small improvement in market confidence.

The headline seasonally adjusted S&P Global Flash Australia PMI Composite Output Index rose to 52.6 in July from 50.4 in the previous month, hitting its highest reading since the start of the year and expanding at a stronger pace than the series average, the index provider said Friday.

"July data indicated a fresh injection of new work across the Australian private sector, ending a four-month run of decline that was the longest since the start of 2024," S&P Global said.

Growth across the private sector remained centered on the service economy, where activity jumped at the fastest pace since January. And while manufacturing output was largely stable from June, it also saw the strongest performance since the start of the year.

The flash readings improved to 53 from 50.5 for the Australia Services PMI Business Activity Index, to 51.7 from 51.5 for the Australia Manufacturing PMI, and to 49.9 from 49.5 for the Australia Manufacturing PMI Output Index.

"There was more positive news with respect to prices, with cost pressures continuing to ease off," said S&P Global Market Intelligence economist Eleanor Dennison. "More stability on the demand front also encouraged firms to more actively protect their margins."

July also saw job additions across both the services and manufacturing sectors as greater workloads led to a rise in backlogged orders.

The level of confidence among Australian businesses ticked up slightly in July, recovering from a more than two-and-a-half-year low hit in June, but remained subdued by historical standards, S&P said.

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