From the AIG:
After two months of mild expansion, conditions in the services sector eased in April 2015. The seasonally-adjusted Australian Industry Group Australian Performance of Services Index (Australian PSI®) declined marginally by 0.5 points to 49.7 points this month, signalling broadly stable conditions across the services industry.
On the other hand, the three-month moving average for the Australian PSI® remains almost unchanged, at 50.5 points in April, signalling the second month of expansion. Recent results from the Australian PSI® suggest growth in Australian demand for goods and services (as measured by the ABS in the National Accounts as ‘domestic final demand’) may have picked up moderately in first four months of 2015.
Only one of the five activity sub-indexes in the Australian PSI® expanded (i.e. above 50 points) in April. The new orders sub-index returned to contraction after three months of expansion while services sales have been patchy over recent months and contracted again in April following an expansion in March. Supplier deliveries contracted for a second month in April while services businesses reduced their stock levels for an 11th consecutive month. More positively, services employment expanded for a fourth month in April.
Five of the nine services sub-sectors showed expansion this month. The very large health and community services sub-sector (51.5 points, three-month moving averages) expanded for a sixth month in April and the finance and insurance services sub-sector expanded for a fourth month (72.0 points). Both retail trade (54.0 points) and personal and recreational services (53.8 points) expanded a second month. The accommodation, cafes and restaurants (‘hospitality’) sub-sector (50.9 points) also expanded mildly in April after five months of contraction. All other services sub-sectors contracted in April.
Although conditions in household services sectors appear to have firmed over recent months due to a lower Australian dollar and an improvement in residential building activity, respondents raised ongoing concerns about subdued consumer sentiment and household spending. In addition, soft business confidence, concerns about local economic and political uncertainties, as well as a low appetite for spending and investment by both the public and private sectors, are still weighing heavily on demand for business services.
Banks firing and that’s about it. Full report.
