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Australia PMI points to softer growth as manufacturing output contracts
August PMI showed input-cost inflation accelerating again, while firms slowed output price increases to the weakest pace since the start of the year.
Australia private-sector activity continued to expand in August, but growth momentum eased, according to S&P Global’s PMI survey cited by Action Forex.
The composite output index fell to 52.5 from 53.2, while services business activity slipped to 52.9 from 53.6, indicating a slower pace of expansion. Manufacturing held at 52.0, but manufacturing output edged down to 49.7 from 50.3, signaling a marginal contraction in factory production.
S&P Global said order books improved, with manufacturing recording its strongest increase in new work since the start of the year, and employment rose modestly. Business confidence strengthened to a six-month high, but services remained the main driver of growth as both activity and new business expanded more slowly than in July.
On costs and pricing, Action Forex reported that input-cost inflation accelerated in August after easing since April. Firms also cut the pace of output-price increases to the slowest level since the start of the year amid supply-chain disruption, leaving the inflation signal less comfortable and keeping margin pressure in focus.