Australian services PMI hits 7-month low of 48.5; Ai Group manufacturing index plunges
Australian economic activity contracted in October 2026 as both manufacturing and service sector output weakened under macro pressures. The Ai Group Manufacturing Index dropped sharply by 13.4 points to -20.1, constrained by sluggish demand, elevated input costs, labor shortages, shipping disruptions, and foreign competition.
Concurrently, the S&P Global Services PMI dropped to a seven-month low of 48.5 (down from 51.9 in September), slipping below the neutral 50.0 line for the first time since May, though topping market forecasts of 47.8.
The Flash Composite PMI matched the services reading at 48.5, signaling overall private sector contraction despite beating preliminary estimates (47.7).
Domestic equities pulled back, with the benchmark S&P/ASX 200 fell 0.6%, to 8,836 in Wednesday morning trade. Meanwhile, the Australian dollar weakened to around $0.70.
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