Australia's manufacturing sector remained unchanged in August as the industry remained flat, with growth in new orders offset by a slight fall in production.

The headline seasonally adjusted S&P Global Australia Manufacturing Purchasing Managers' Index (PMI) was unchanged at 52 in August, still above the 50-mark that signals expansion.

Business confidence and new orders strengthened in August, supporting further job creation, though production fell slightly and purchasing was scaled back amid marked input costs and supply-chain pressures.

New orders rose at the sharpest pace since January, with new export orders also returning to growth, while manufacturer confidence strengthened for the fourth consecutive month from April's recent low to reach its highest since February.

Job creation helped firms reduce backlogs of work, which fell to their largest extent in just over a year, with staffing increases reflecting a mix of contract workers and longer-term hires linked to expansion plans.

Input cost inflation quickened slightly in August, though it remained below levels typically seen since the start of the Middle East conflict, with higher freight and fuel costs widely cited, while output price inflation eased for the third consecutive month to its slowest since February.

Supply chain disruptions linked to the Middle East conflict continued to weigh heavily on the sector, with supplier delivery times lengthening sharply and panellists noting international shipping delays and delivery consolidations by suppliers seeking to limit freight costs.