Australian Industry Group Performance of Services Index

A cracking result, a big jump from May and adding to the positive signs for the Australian economy.

Key points from AiG;

Fourth consecutive month of expansion for the services sector

All five of the activity sub-indexes were positive and indicated growth in June

  • Sales grew at a faster pace than in May, up 2.2 points to 54.7 points. New orders lifted 6.1 points to 58.9 points. Stocks rose but at a slower pace than in May (51.3 points). Supplier deliveries moved into expansion (53.1 points) in June, as did employment (53.2 points) in June.

Five of the nine sub-sectors expanded in June (trend)

  • Property and business services (57.6 points), finance and insurance (54.7 points), wholesale trade (52.7 points), personal and recreational services (52.3 points) hospitality (accommodation, cafes and restaurants) (51.2 points) all maintained or improved their growth rates in June.
  • Transport and storage (up 0.8 points to 49.9 points) and health and community services (49.0 points) were broadly stable, while retail trade (down 0.8 points to 47.8 points) and communication services (down 0.8 to 44.1 points) contracted at a slightly faster pace in June.

Respondents noted positive demand for business-to-business services from the construction and infrastructure investment sectors. Some businesses noted better consumer confidence, but this does not seem to be translating into better conditions or sales in retail. Others said heightened competition from offshore and online providers is dampening activity across local consumer-oriented services sectors.

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AUD not responding much, but it rarely does too much on the release of this indicator.

Earlier in the week we got the Australian manufacturing PMI from AiG:

  • Australia - manufacturing PMI (June): 55.0 (May was 54.8)

And a new set: