The Australian private sector's output grew for the third consecutive month in August as business activity increased for the fourth time in five months, buoyed by service sector expansion and a rise in new orders.

The headline seasonally adjusted S&P Global Flash Australia PMI Composite Output Index posted at 52.5 in August, down slightly from 53.2 in July but remaining above the 50 mark that separates growth from contraction, the index provider said Friday.

The Flash Australia Services PMI Business Activity Index came in at 52.9 for August from 53.6 in the previous month. The Flash Australia Manufacturing PMI was unchanged at 52, while the Flash Australia Manufacturing PMI Output Index fell to 49.7 from 50.3 in July.

Although cost pressures intensified in August, charge inflation retreated to its least pronounced level since the start of the year. At the same time, the 12-month outlook for activity was the most optimistic since February, S&P Global said.

As manufacturing output tipped into contraction, goods producers who booked lower production volumes attributed the decline to staffing-related disruptions, longer wait times on input deliveries, and cost pressures.

"Positively, manufacturing enjoyed its strongest injection of new work since the start of the year, although disruption to supply chains and challenges on the cost front led to a slight drop in output," said S&P Global Market Intelligence economist Eleanor Dennison.

The overall volume of new orders improved for a second straight month in August, reflecting both new customer wins and a general pick-up in market conditions. Additionally, the August data showed the first signs of improvement in export performance since March amid a rebound in global demand for goods manufactured in Australia.

S&P Global noted that at the composite level, employment has now increased in 19 of the last 20 months.