Australia Private Sector Growth Lowest In 33 Months

Australia's private sector growth was the slowest in thirty three months in January, as the softer service sector offset a modest pick-up in manufacturing activity, preliminary survey data from IHS Markit showed on Thursday.

The Commonwealth Bank of Australia flash composite output index fell to 51.5 in January from a survey high of 52.9 in December. However, readings above 50.0 signal growth in the sector.

Private sector expansion has slowed for straight two months and the latest pace of growth was the weakest since the survey began in May 2016.

Growth in new orders and employment slowed, while inflationary pressures softened. Meanwhile, business confidence hit a four-month high amid stronger optimism across both monitored sectors.

The services Purchasing Managers' Index, or PMI, fell to 51.0 in January from 52.7 a month ago.

Services growth eased for the second successive month in January and was the slowest in the 33 months of data collection so far, the survey report said.

The manufacturing PMI rose to 54.3 in January from 54.0 in the previous month.

"The Flash PMI shows that the Australian economy entered 2019 on a weakish note," Commonwealth Bank Australia Chief Economist Michael Blythe said.

However, turns in the Manufacturing PMI tend to lead turns in the Services PMI by two months, Blythe observed.

"The leading new orders and employment indexes are also sending a more positive signal than the headline PMI," the economist added.