Australia's private sector expanded for a fourth straight month in September, but at the softest pace seen in the third quarter, with S&P's Australia composite PMI output index slipping to 50.8 from 52.7 in August, according to data released Wednesday by S&P Global.

The report said a fresh drop in export orders weighed on overall demand, with new business growth slowing enough to trigger the first decline in employment since May, marking the sharpest pullback in headcount since October 2020.

Services activity kept growing but at a slower pace for the second consecutive month, while manufacturing output fell at its fastest rate in almost two years, amid a renewed contraction in order book, S&P added.

Job losses were broad-based across sectors despite being only modest overall, the report added, with business confidence sliding to a three-month low and falling further below its long-run average as firms flagged concerns over costs, weaker demand and customer retention.

The S&P report showed that Australia's services PMI business activity index fell to 51.4 from August's 53.2, the manufacturing PMI was down to 49.3 from 52 in August, while the PMI output index decreased to 46.4 from 49.6.

Input costs rose at their fastest pace in three months, driven largely by services businesses, even as manufacturing cost inflation eased from August, the report said.

Goods producers also faced longer delivery delays as supply chain disruptions worsened, while output prices climbed more sharply than in the prior month, it added.