Australia – AIG Performance of Services index for October: 43.6

  • prior was 45.4
  • Down 1.8 points from September
  • Lowest since August 2013
  • In contraction for 8 straight months
  • 3-month average is at 46.1, lowest in a year

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KEY FINDINGS from the release:

  • All of the activity sub-indexes below 50 (i.e. contraction) this month
  • In particular, both supplier deliveries and stock levels contracted at their fastest pace since August 2013, suggesting a weak outlook for the upcoming crucial Christmas trading period by services businesses
  • The sales and new orders sub-indexes contracted for a second month in October. The employment sub-index also indicated contraction following a brief expansion in September
  • Only two out of the nine services sub-sectors showed mild expansion this month (above 50 points, three month moving averages), including accommodation, cafes and restaurants (50.5 points) and personal and recreational services (51.0 points)
  • The very large health and community services sub-sector stabilised (49.9 points, three-month moving averages) in October, following an unusual contraction in conditions last month. Both the wholesale and retail trade sub-sectors, as well as business oriented services sub-sectors, contracted this month
  • Respondents to the Australian continued to raise concerns about the weak state of the local economy, the ongoing decline in mining construction activity and the manufacturing industry, as well as slow growth in household disposable income and subdued consumer sentiment

This data point is not a big focus for the market, so there is little impact on the AUD.