The S&P Global Australia Manufacturing PMI weakened to 51 in May 2025 from 51.7 in April, falling for the second straight month to the lowest level since February. The deceleration was driven by a softer rise in new orders, despite a rebound in export demand. Output contracted during the month, marking only the second decline so far this year.
Weaker production was also reflected in a drawdown of input inventories, as firms reduced purchasing activity amid continued delivery delays. Despite the decline in output, business confidence improved.
Manufacturers reported increased optimism about future sales, citing business development plans and growing economic and trade stability. Staffing levels also rose for a third consecutive month as firms prepared for anticipated growth. On the pricing front, selling price inflation moderated, while input cost inflation slowed to its lowest rate in six months.