Australian services PMI recedes further

The second the AIG PMIs is out this morning and is another fizzer:

The sales sub-index in the Australian PSI® fell sharply again in April, dropping by 5.1 points to 44.6 points, the lowest reading since August 2013 and slightly below its 12-month average.
• The new orders sub-index in the Australian PSI® moved 2.0 points lower, to 49.8 points, following three months of expansion (readings above 50 points) in new orders in the first quarter of 2014.
• Services employment continued to contract this month, albeit at a slower pace, with the employment index in the Australian PSI® moving up by 2.4 points to 47.7 points.
• Supplier deliveries expanded in April, with the sub-index rising by 5.4 points to 53.7 points. Stock levels also strengthened slightly this month, possibly reflecting increased inventory holdings in the lead-up to this year’s extended Easter holiday period. The inventories sub-index moved up by 0.6 points to 50.4 points. Both sub-indexes remain above their respective 12-month averages.
• Capacity utilisation across the services industries decreased by 1.2 percentage points to an average of 77.1% of current capacity being utilised in April.

Here are the internals which show sales were hardest hit:

Slowing marginal indicators are mounting up. There is nothing disastrous happening, but the post-election bounce appears to have peaked in the first quarter and the economy has been slowing since. It’s more of a lull at this stage but given the capex cliff is likely to get worse as the year rolls on, a loss of momentum at this stage will make the second half look rather like last year’s underwhelming performance.

Full report here.