Australia Manufacturing PMI Falls to 49.3 as Services Growth Slows

Key Facts

Australia's flash manufacturing PMI fell to 49.3 in September from 52.0 in August, moving below the 50 threshold separating monthly improvement from contraction. Services activity PMI declined to 51.4 from 53.2 but remained in expansion territory.

The composite output PMI dropped to 50.8 from 52.7, showing that private-sector activity continued to grow at a limited pace. Overall new business still increased, but more slowly, as manufacturing orders returned to decline and export orders fell.

The survey also showed payroll reductions, while input-cost inflation accelerated to a 3-month high and selling-price increases remained strong. The combination of weaker employment and sustained cost pressure points to softer demand without eliminating inflation risk.

For markets, weaker activity and employment can reduce expectations for interest-rate increases and weigh on the Australian dollar (AUD), while strong price pressure can work in the opposite direction by keeping monetary tightening in play. The available evidence does not establish a contemporaneous Australian-dollar (AUD) price move after the release.