Australia's manufacturing sector expansion slowed in May, with new orders rising gradually and production declining for the first time in three months, according to a survey by S&P Global published Monday.

The headline seasonally adjusted S&P Global Australia Manufacturing Purchasing Manager's Index fell to 51 in May from 51.7 in April, the lowest since February.

Stocks of purchases fell amid reduced buying activity and ongoing delivery delays; however, staffing levels rose for a third successive month, the survey said.

New orders rose halfway through the second quarter, supported by stronger export demand. However, overall growth slowed, partly due to the federal election. Manufacturing production also contracted for only the second time this year. Together, these factors led to a renewed decline in purchasing activity, the survey added.

Overall business confidence improved for the first time in three months, the report said. Meanwhile, average input prices rose in May, driven by higher raw material and transport costs.