Australia's private sector activity expanded for the fourth time in five months in August, with services activity offsetting a slight contraction in manufacturing, according to preliminary S&P Global PMI data released Friday.
The S&P Global Flash Australia Composite Output Index registered 52.5 in August, down from 53.2 in July but remaining above the 50-threshold that separates expansion from contraction. The services PMI declined to 52.9 from 53.6 in the prior month, while manufacturing output slipped to 52.0, unchanged from July's reading.
Goods producers reported ongoing challenges, including staffing shortages, extended input delivery times, and rising cost pressures, which weighed on manufacturing output. Despite this, new orders across the private sector rose for a second consecutive month, led by manufacturers. Export performance improved for the first time since March, reflecting a recovery in international demand for Australian goods.
The Reserve Bank of Australia now has additional leeway to consider further interest rate hikes, as business activity remained firm despite signs of cooling in manufacturing and labor market indicators. The data suggests a mixed but resilient economic backdrop for policymakers weighing monetary policy adjustments.
