The S&P Global Flash Australia Services PMI Business Activity Index rose to 54.1 in July from 51.8 in June, marking the highest level since March 2024 and signaling a stronger expansion in the services sector. The expansion was fueled by a sharp rise in new business, mainly in the domestic market, while export demand stabilized after four months of contraction. Real estate and business services led the gains, and firms increased hiring to manage workloads, reducing backlogs for a third straight month. Input cost inflation intensified, driven by higher material, fuel, and labor costs, prompting firms to raise prices at the fastest pace in nearly two years. While overall sentiment remained positive, business confidence slipped to a nine-month low amid cost concerns and economic uncertainty. Some firms, however, remained optimistic due to expansion plans and potential interest rate cuts.