Australia's private sector composite output index posted 52.5 in August, down from 53.2 in July, marking a third consecutive month of growth though at a slightly softer pace, with services activity driving the expansion while manufacturing output tipped into mild contraction, according to a Friday flash report by S&P Global.

The report said growth in overall new orders was broad-based by sector, with goods producers attributing lower output to staffing issues, longer input delivery wait times and cost pressures, while the services business activity index came in at 52.9, down from 53.6 in July, and the manufacturing output index eased to 49.7 from 50.3.

Cost pressures picked up in August after softening in each of the three prior months, though charge inflation retreated to its least marked since the start of 2026, the report added.

Business confidence reached a six-month high in August, with firms citing expansion plans, increased commercial activity, and hopes for an improvement in customer confidence as reasons for optimism, though sentiment remains subdued by historical standards, S&P added.