Australia’s Economy Barely Grows as Services Rebound Fails to Lift Weak Demand

Australia’s private sector stabilized in April 2026 after shrinking in March, with the flash composite PMI rising to 50.1 from 46.6, just above the growth mark. The improvement was driven by services, where activity edged up to 50.3 from 46.3, while manufacturing PMI increased to 51.0 from 49.8. However, manufacturing output fell further to 48.2 from 49.4, marking a third straight monthly decline and limiting overall growth. Demand remained weak as new business fell for a second month, though export orders rose slightly with gains from North America, Asia, and New Zealand. Cost pressures intensified, reaching the highest since August 2022, driven by fuel and shipping costs linked to Middle East tensions. Selling prices hit a three-and-a-half-year high, while confidence dropped to its lowest in nearly two-and-a-half years despite stronger hiring and rising backlogs.