Australia April Services PMI (final) 50.7 (preliminary 50.3, prior 46.3)

Australia's services PMI rose to 50.7 in April from 46.3 in March, but new orders fell for a second month and input price inflation hit its fastest pace since August 2022, driven by Middle East fuel costs. Summary: The S&P Global Australia Services PMI Business Activity Index rose to 50.7 in April from 46.3 in March, returning to expansion territory after a contraction in the prior month, per the S&P Global release New orders fell for a second consecutive month in April, with the pace of decline marginally faster than in March, with respondents citing higher fuel costs linked to the Middle East war as a key driver, according to S&P Global Input price inflation accelerated sharply in April to its fastest pace since August 2022, with more than 43% of respondents reporting rising input costs, while output price inflation hit its fastest rate since January 2023 as firms passed costs on to customers, per the survey Business activity growth was confined to just two of the five monitored sectors, information and communication and consumer services, while transport and storage, finance and insurance, and real estate and business services all contracted, according to the release Staffing levels rose for the sixteenth consecutive month in April, at a pace quicker than March, helping firms work through backlogs which fell at their sharpest rate since November 2024, per S&P Global The Composite Output Index returned to expansion at 50.4 in April from 46.6 in March, though business sentiment eased again to its lowest level in 22 months, according to the survey S&P Global Economics Director Andrew Harker warned that the sustainability of the activity and employment expansions remains in question given falling new orders and intensifying inflationary pressures, and said the outlook hinges on how the Middle East conflict and Hormuz disruption evolve Australia's services sector returned to growth in April, but the recovery rests on uncertain foundations, with new orders falling for a second straight month and fuel-driven inflation surging to its highest level in nearly four years as the economic consequences of the Middle East war continue to ripple through the Asia-Pacific region. The S&P Global Australia Services PMI Business Activity Index rose to 50.7 in April from 46.3 in March, crossing back above the 50.0 threshold that separates expansion from contraction. The rebound was driven primarily by sustained job creation rather than demand, with rising staffing levels allowing firms to process existing work even as the flow of new business continued to weaken. Employment has now grown in sixteen consecutive months, and the pace of hiring accelerated in April relative to March. The demand picture, however, remains troubled. New orders declined for a second successive month, and the pace of that decline was marginally faster than in March. Survey respondents identified the Middle East war as a central factor, particularly through its impact on fuel costs, which are feeding directly into purchase decisions and dampening client appetite. International new business offered a partial offset, ticking higher in April after a solid contraction in March, but not by enough to compensate for the domestic shortfall. The inflationary dimension of the report is its most significant element for the broader economic outlook. Input price inflation accelerated sharply in April to its fastest pace since August 2022, with more than 43% of respondents signalling higher costs during the month. Firms in transport and storage recorded the steepest input cost increases of any sector covered, reflecting their direct exposure to fuel price movements, and also led on selling price inflation. Across the services sector as a whole, output prices rose at the fastest rate since January 2023 as businesses moved to recover margin through higher charges to customers. The combination of rising costs and falling new orders produced a bifurcated sectoral picture. Activity growth w