• The Australian Industry Group Australian Performance of Services Index (Australian PSI®) rose by 3.3 points to 54.8 points in June (seasonally adjusted). This was the fourth consecutive month of expansion for the services sector. Results above 50 points indicate expansion, with higher numbers indicating a stronger rate of expansion.
• All five of the activity sub-indexes in the Australian PSI® were positive and indicated growth in June (seasonally adjusted). Sales grew at a faster pace than in May, up 2.2 points to 54.7 points. New orders lifted 6.1 points to 58.9 points. Stocks rose but at a slower pace than in May (51.3 points). Supplier deliveries moved into expansion (53.1 points) in June, as did employment (53.2 points) in June.
• Five of the nine sub-sectors in the Australian PSI® expanded in June (trend) with results above 50 points. Property and business services (57.6 points), finance and insurance (54.7 points), wholesale trade (52.7 points), personal and recreational services (52.3 points) hospitality (accommodation, cafes and restaurants) (51.2 points) all maintained or improved their growth rates in June. Transport and storage (up 0.8 points to 49.9 points) and health and community services (49.0 points) were broadly stable, while retail trade (down 0.8 points to 47.8 points) and communication services (down 0.8 to 44.1 points) contracted at a slightly faster pace in June.
• Respondents to the Australian PSI® noted positive demand for business-to-business services from the construction and infrastructure investment sectors. Some businesses noted better consumer confidence, but this does not seem to be translating into better conditions or sales in retail. Others said heightened competition from offshore and online providers is dampening activity across local consumer-oriented services sectors.
Hard to miss that firming trend. All good for now. Full report.
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.
