Australian Manufacturing Activity Growth Takes A Pause In October

By James Glynn

SYDNEY--An expansion in Australian manufacturing activity since the start of the year hit a speed bump in October, with businesses shedding staff as confidence dropped to a four-month low.

The headline seasonally adjusted S&P Global Australia manufacturing purchasing manager's index fell to 49.7 in October, down from 51.4 in September. It is the first contraction since December 2024, albeit only marginally.

The slowdown in activity comes as hopes fade for further interest rate cuts by the Reserve Bank of Australia amid an uptick in inflation in the third quarter. Some economists have ruled out further reductions entirely given the stubbornness of core inflation.

Company head counts fell for the first time in eight months, a result consistent with recent data showing some deterioration in the broader job market.

Uncertainty in the global economy due to the trade war and rising geopolitical tensions also form the backdrop to the weaker activity reading in October.

"The latest downturn in production was accompanied by the first fall in head counts in eight months, altogether suggesting that goods producers have become more cautious regarding the outlook for growth," said Jingyi Pan, economics associate director at S&P Global Market Intelligence.

"Manufacturers also notably faced heightened margin pressures in October, as output price inflation eased despite an intensification of cost inflation, reflecting the impact of intense competition going into the fourth quarter," she added.

Write to James Glynn at james.glynn@wsj.com

(END) Dow Jones Newswires

November 02, 2025 18:20 ET (23:20 GMT)