Australia’s business activity accelerated sharply in January, pointing to a strong start to 2026. PMI Manufacturing rose from 51.6 to 52.4, while PMI Services surged from 51.1 to 56.0. As a result, PMI Composite jumped from 51.0 to 55.0, marking the joint-highest level since April 2022 and signaling a broad-based expansion.
According to Jingyi Pan of S&P Global Market Intelligence, the flash PMI data show that growth has become “more balanced”, with “solid expansions evident across both manufacturing and services”. The readings reflect resilient domestic demand and improving momentum entering the new year.
That said, forward-looking indicators were mixed. Faster new order growth contrasted with declining business confidence, particularly among service providers.
While output price inflation eased, driven by softer service-sector charges, rising manufacturing input costs remain a risk factor, suggesting inflation pressures could re-intensify later in the quarter.
