Australia’s factory PMI falls into contraction in September as services slow

Australia’s manufacturing sector contracted in September, while services growth slowed sharply, according to flash PMI data from S&P Global released Wednesday.

S&P Global’s Flash Australia manufacturing PMI came in at 49.3 for September, down from 52.0 in August and below the 50 level that signals expansion.

Services activity slipped to a PMI reading of 51.4 in September from 53.2 in August, and the composite index eased to 50.8 from 52.7 over the same month.

New business volumes rose for a third consecutive month, though at the weakest rate in that span. A fresh fall in new manufacturing orders restrained overall growth. New export orders declined for the fifth time in six months, again reflecting weakness in manufacturing.

The moderation in business activity comes as Australia’s economy faces the twin pressures of elevated inflation and rising interest rates. The Reserve Bank of Australia is widely expected to raise rates by 25 basis points for a fourth time this year at its meeting in the coming week.

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