Economic Buzz: Australia business activity growth remains modest

The headline seasonally adjusted S&P Global Flash Australia PMI Composite Output Index posted 51.2 in June, up from 50.5 in May. Although growth remained modest, the latest reading signaled an acceleration in the pace of business activity expansion to the second fastest in ten months, just behind that seen in March.

June data indicated that business activity in Australia?s private sector expanded at a faster pace. This was underpinned by greater new business inflows, though export orders shrank at a sharp rate. Sentiment improved midway through the year while staffing levels also continued to rise.

Turning to prices, rates of input cost and output price inflation slowed at the end of the second quarter, the latter falling to the lowest level in over four-and-a-half years.

The latest rise in output reflected greater inflows of new orders. Growth in new work was notably driven by domestic clients as new export orders returned to contraction.

Overall sentiment improved at the end of the second quarter of 2025. Business confidence was lifted to the highest level in five months, albeit with a notable divergence by sector.

A combination of rising new business and positive sentiment led to a sixth successive monthly rise in employment.

There were signs of inflationary pressures softening in June, with both input costs and output prices rising at slower rates than in May.

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