Australian Industry Group Performance of Services Index
- prior 57.7
- 3rd month of growth following three months of stability or contraction in Q3 of 2016
The Australian Industry Group's 'key findings' on the Australian Performance of Services Index in January (bolding mine):
- Four of the five activity sub-indexes were above 50 (indicating expansion). Deliveries grew strongly, lifting by 10.2 points to 61.0 points in January, the highest reading since the sub-index began. Sales continued to grow solidly in January (57.4 points), while employment continued to grow (53.8 points) although at a slower pace than in December (56.6 points). New orders remained expansionary (51.8 points) but the rate of growth slowed. Stocks fell into contractionary territory, losing 6.7 points to reach 45.9 points.
- Six of the nine services sub-sectors expanded in January (trend data). Personal and recreational services continued to grow strongly (65.0 points), while finance and insurance strengthened (62.7 points). Retail trade and wholesale trade both improved (55.6 points and 58.2 points respectively). Property and business services grew at a slightly faster pace (54.0 points), as did transport and storage (51.6 points and the first time the sub-sector has grown since September 2011). Health and community services was stable in January (50.8 points). Communication services contracted for a fourth month (47.4 points), while the hospitality sub-sector (accommodation, cafes and restaurants) shrank for a thirteenth month (43.9 points).
- A number of regional respondents noted that a good agricultural season (crops and prices) are having a positive impact on some services sectors. Positive factors for others include better customer confidence and demand and the relatively low Australian dollar in January. Problems included the cost of utilities, lack of disposable income, auto industry closures and lower demand from mining businesses.
I highlighted 'retail' above as this has a been a softer area of the economy. The PMI survey at least is looking OK for it, lets see if that translates into official data.
A little more detail on the 'retail' indicator in the survey (from AiG, bolding mine):
- The retail trade sub-sector's index increased by 4.1 points to 55.6 points in January, marking its highest reading in seven months and a welcome return to growth after five months of contraction or flat conditions.
- After a positive period in the middle of 2016, retail trade had a number of lacklustre months before growing again in January, following the traditionally busiest (and often the most profitable) month of the year for most retailers nationally.