FX.co ★ Australia Services PMI Hits 16-Month High in July

The S&P Global Flash Australia Services PMI Business Activity Index increased to 54.1 in July from 51.8 in June, reaching its highest level since March 2024 and indicating a more robust expansion in the services sector. This growth was primarily driven by a significant uptick in new business within the domestic market, as export demand steadied following four months of decline. Gains were predominantly seen in real estate and business services, prompting companies to boost hiring to manage workloads and subsequently reduce backlogs for the third consecutive month. Inflation in input costs became more pronounced, influenced by rising expenses for materials, fuel, and labor, leading firms to implement the most rapid price increases in nearly two years. Although the overall sentiment remained positive, business confidence diminished to a nine-month low owing to concerns over costs and economic uncertainty. Nonetheless, some companies expressed optimism, citing expansion plans and the prospect of interest rate reductions.