Australia Services PMI Accelerates the Most in Nearly 4 Years

The S&P Global Australia Services PMI Business Activity Index rose to 56.3 in January from 51.1 in December, indicating the sharpest acceleration in service sector expansion in nearly four years, according to final readings. The stronger outturn reflected a surge in services activity and new business growth, with new orders rising at the fastest pace since April 2022 amid improved domestic and overseas demand. Employment increased at a solid and faster pace as firms hired to cope with heavier workloads, though signs of labour constraints persisted and contributed to rising backlogs. Export demand strengthened, leading to a firmer increase in new export business compared with December. Business confidence, however, declined in January amid concerns over the economic outlook and competition. On the cost side, input price inflation eased despite ongoing wage and supply cost pressures, while selling price inflation also softened and fell to a two-month low.