Australia's Private Sector Growth Slows Amid Rising Prices

Australia's private sector growth slowed in September to its weakest pace of the third quarter, according to S&P Global's preliminary survey data released on Wednesday. The flash composite output index fell to 50.8 from 52.7 in August, remaining above the 50-point threshold that separates expansion from contraction for the fourth consecutive month but signaling only modest growth.

Growth momentum has weakened, with manufacturing emerging as the primary drag. The services sector continued to drive growth, but its index slipped from 53.2 to 51.4, marking the second consecutive monthly slowdown, and signaling a gradual cooling in consumer and business-service demand.

The Reserve Bank of Australia is set to meet next week and consider whether to raise interest rates. Weakening demand and job cuts call for a cautious wait-and-see approach, while accelerating increases in selling prices keep the case for raising interest rates to curb inflation intact.