Australian private sector activity shrinks in March, marking the first decline in a year and a half

Australian Private Sector Contracts at Start of 2026

According to preliminary PMI® figures from S&P Global, Australia's private sector experienced a downturn at the close of the first quarter of 2026. This marks the first contraction in eighteen months, as demand weakened. The decrease in overall business activity was the most pronounced since late 2023, primarily driven by a notable slump in the services sector, which saw its first decline in over two years. In contrast, manufacturing output registered only a slight decrease. Companies also contended with significant cost increases, with inflation reaching its highest level in more than three years. Some of these rising expenses were transferred to customers.