While the stock market today will be celebrating the Westpac result, the prices that really matter, those in the economy, are pushing in the opposite direction. The latest is the AiG services PMI for April, the PSI, which fell sharply from 49.6 to 44.1:
The weakness is less broad based than the PMI, with consumer sectors holding up better than some others:
The more business-oriented services sub-sectors reported that activity in April was hampered by: uncertainty surrounding the upcoming Federal budget and election; state government spending cuts, (particularly in South Australia); reduced demand for business services from mining; and continued weakness in large parts of the manufacturing and construction sectors.
Sales tumbled:
New orders did too:
Employment weakened:
The whole damn thing weakened:
These falls were not as bad as the PMI and are not yet trend busting, which has been promising. Moreover, I don’t think this index is all that reliable in any precise way. So no cause for panic but no cause for celebration either.
