Australia's flash composite PMI fell to 47.7 in October, the first drop in private sector output in five months

Private sector output in Australia shrank in October for the first time in five months, according to the S&P Global flash purchasing managers' survey released at 9 a.m. Sydney time on Friday.

The composite output index fell to 47.7 from 51.3 in September, its lowest since March. Below 50 means contraction. The services business activity index dropped to 47.8 from 51.9, the first decline since May, while manufacturing stayed soft: the manufacturing PMI edged up to 49.7 from 49.6 and the factory output index to 46.5 from 46.2.

Growth in new business slowed to almost nothing, with orders for goods falling faster. Companies told S&P Global that a lack of market confidence, higher borrowing costs and inflation were weighing on demand. Export orders were broadly flat.

Prices moved the other way. Input costs and selling prices both rose at faster rates in manufacturing and services, and Jingyi Pan, economics associate director at S&P Global Market Intelligence, said the prices data indicated inflation could stay elevated in the months ahead.

Hiring held up. Service providers added staff to work through orders that had piled up, so employment rose overall even as output fell. The survey responses were collected October 12 to 21.