Australian September Flash PMI Shows Economy Losing Momentum

By James Glynn

SYDNEY--Australian private sector business activity continued to expand in September, but at a reduced rate as global shocks, rising costs and talk of higher interest rates took a toll.

The headline seasonally adjusted S&P Global Flash Australia PMI composite output index stood at 50.8 in September, down from 52.7 in August.

"Businesses lost some confidence in their growth prospects in September. This coincided with cutbacks to payrolls, stronger cost pressures, signs of softer demand and renewed export weakness," said Eleanor Dennison, economist at S&P Global Market Intelligence.

The loss of momentum in activity comes as the Reserve Bank of Australia has signaled that it might raise interest rates further at a policy meeting next week, adding to three hikes announced in the first half of the year.

Senior officials at the RBA have been united in highlighting the need to get inflation down, especially as the Middle East war remains unresolved and as investment in artificial intelligence data centers stokes demand.

RBA Governor Michele Bullock said last week that a slowdown in demand across the economy was needed to bring inflation back down to the target of 2.5%.

A fall in export business weighed on growth in overall new orders in September, with a slower new business triggering job losses, the PMI data showed.

The rate of input price inflation picked up to its highest in three months, while output charges also rose at a strong rate, the data showed.

Manufacturing output recorded its weakest activity in 21 months in September, amid a renewed contraction in order books, according to the report.

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

(END) Dow Jones Newswires

September 22, 2026 20:07 ET (00:07 GMT)