PSI collapses again

The AiG Performance of Services Index for August is out and it has collapsed again:

This is one of the indicators that triggered an overly bearish episode for me earlier this year so some skepticism is in order. However, there is one standout point about the August result and that is how generalised the slowdown was:

Everything except finance and wholesale fell. And the magnitude of the dump was impressive for sales:

Given the broader data flow, it’s reasonable to surmise that the index is right that August was a slowing month for services activity but to what extent this index is not reliable enough to say.

Psi Report August 2012 Final (1)

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About the author

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.