Australian Private Sector Business Activity Stalls in October

By James Glynn

SYDNEY--Australian private sector business activity stalled in October, hitting its lowest levels since March as interest rates continued to rise and global shocks intensified.

The headline seasonally adjusted S&P Global flash Australia PMI composite output index fell to 47.7 in October, down from 51.3 in September.

The downturn in activity is being driven by higher prices and rising interest rates, said Jingyi Pan, economics associate director at S&P Global Market Intelligence

"Business confidence was also shown to have taken a hit from ongoing economic uncertainties," she added.

The data comes as the Reserve Bank of Australia warns that inflation outlook has become "materially worse," prompting heightened speculation that interest rates will be raised further in November.

The RBA has already raised interest rates four times since the start of the year as inflation has stayed well above the central bank's target of around 2.5%.

The slowdown in activity in October did nothing to cool price growth with both input and output price inflation higher in October.

"Worryingly, October's PMI prices data indicated that inflation could remain elevated in the coming months with both input costs and output prices rising at faster rates across both broad sectors tracked," Pan said.

Despite the slowdown, firms hired additional staff in October, driven by job creation in the service sector.

After shedding staff at the end of the third quarter, service providers opted to raise employment to cope with outstanding workloads, the data showed.

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

(END) Dow Jones Newswires

October 22, 2026 19:30 ET (23:30 GMT)