The upturn in the Australian service sector gained pace midway through the fourth quarter as the economic recovery from recent lockdown measures continued. Business activity growth accelerated in November as demand strengthened. New orders rose for a third consecutive month despite falling exports. A sustained recovery saw firms take on additional staff for the first time since January. Confidence regarding the year-ahead outlook remained elevated. Meanwhile inflationary pressures intensified. The headline figure derived from the survey is the IHS Markit Australia Services Business Activity Index, which is designed to provide timely indications of changes in business activity in the Australian service sector. Readings above 50.0 signal an improvement in business activity on the previous month while readings below 50.0 show deterioration. The seasonally adjusted Business Activity Index rose from 53.7 to 55.1 in November, indicating a marked increase in activity. The latest reading was the highest since July. Respondents highlighted that a further easing of measures to control the spread of the coronavirus disease 2019 (COVID19) pandemic was a key reason for the rise in activity.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
