Core Viewpoint - The latest data from S&P Global indicates that Australia's private sector is experiencing accelerated growth in July 2025, driven by a recovery in manufacturing output and increased activity in the services sector [1][2]. Group 1: Economic Indicators - The S&P Global Flash Australia PMI Composite Output Index rose from 51.6 in June to 53.6 in July, indicating expansion in the private sector [1]. - The manufacturing PMI output index increased from 50.6 in June to 51.6 in July, while the services PMI activity index rose from 51.8 to 53.8 [3]. - New orders in the private sector saw the largest increase in over three years, particularly in manufacturing, which experienced its highest growth in two and a half years [2]. Group 2: Employment and Business Sentiment - Private enterprises increased hiring in response to the growth in new orders, although business optimism has weakened, reaching an eight-month low [2]. - Despite the increase in new orders, manufacturing employment growth has slowed, and procurement activities have decreased, indicating a cautious outlook among manufacturers [2]. Group 3: Inflation and Monetary Policy - Price pressures faced by private enterprises intensified in July, suggesting a potential rise in inflation in the coming months, which adds uncertainty to the monetary policy outlook of the Reserve Bank of Australia [2].

Core Insights - The S&P Global Flash Australia PMI Composite Output Index decreased from 51 in April to 50.6 in May 2025, indicating a slowdown in the growth of Australia's private sector business activity [1][2] - Despite a recovery in exports, the overall growth rate of new business also declined, reflecting a mixed outlook for the private economy [1] - Business confidence among private enterprises weakened in May, although hiring continued at a steady pace, suggesting a cautious but optimistic short-term outlook [1] Summary by Category Economic Activity - The private sector in Australia continued to grow in May, but the pace of growth slowed due to a decline in both manufacturing output and service sector activity [1] - The manufacturing PMI output index fell from 51 in April to 50.6 in May, while the services PMI activity index dropped from 51 to 50.5, marking a six-month low [2] Business Confidence - Business confidence in the private sector showed signs of weakening, yet companies maintained a steady hiring pace, indicating a level of optimism about short-term prospects [1] - The report suggests that the upcoming Australian elections may have contributed to the slowdown in new order growth, with expectations for a rebound in the coming months [1]

Group 1 - The S&P Global Flash Australia PMI Composite Output Index decreased from 51.6 in March to 51.4 in April 2025, indicating continued growth in Australia's private sector but at a slower pace [1][3] - The private sector's business activity in April was supported by an increase in new business, with the fastest growth in manufacturing and services since April 2022 [1][2] - Despite a stable increase in employment, the backlog of work in private enterprises saw the largest growth in nearly three years, driven by rising demand [1][2] Group 2 - The overall sales price increase in Australia's private sector reached a nine-month high due to rising demand, although costs are also increasing rapidly [2] - Geopolitical uncertainties and the impact of U.S. tariff policies have weakened export performance and affected business confidence in April [2][3] - The manufacturing PMI output index fell from 51.8 in March to 51.5 in April, while the services PMI activity index decreased from 51.6 to 51.4 [3]