james green
SYDNEY – Australian business output contracted for a fourth straight month in January as the fallout from sharp interest rate hikes since last May sapped confidence across the economy.
The Judo Bank Flash Australian Composite PMI Output Index climbed to 48.2 in January from 47.5 in December. While private sector output continued to contract, the decline was the slowest in three months.
The decline in output was largely due to weaker service sector activity and a drop in manufacturing production, the data showed. Judo Bank said new orders rose for the first time since September 2022, helped by better performance in the services sector.
The Reserve Bank of Australia is expected to raise interest rates for the ninth time in a row in February in response to the worst inflationary pressures since the 1980s.
Business hiring held steady in January despite the contraction in output. Both manufacturers and service providers have increased workforce capacity to address labor shortages.
Australia’s services PMI business activity index rose to a three-month high of 48.3 in January from 47.3 in December, according to Judo Bank.
Write to James Glynn at james.glynn@wsj.com