02.06.202623:00:00UTC+00Australia’s Services Activity Slips Back into Contraction as S&P Global PMI Falls Below 50

Australia’s services sector moved back into contraction territory in May, as the S&P Global Services PMI declined to 48.7, down from 50.7 previously. The latest reading, updated on 2 June 2026, signals a weakening in activity after the sector had been hovering just above the growth threshold.

The PMI, where a level of 50 marks the boundary between expansion and contraction, suggests that demand conditions in Australia’s services economy softened over the period. The drop from 50.7 to 48.7 indicates that firms are experiencing a pullback in activity compared with the prior month’s marginal expansion.

Market participants and policymakers will be watching subsequent releases closely to assess whether May’s figure marks the beginning of a more sustained downturn in services activity or a temporary setback following a fragile spell of growth.