• The Australian Industry Group Australian Performance of Services Index (Australian PSI®) lifted 0.3 points to 51.7 in November (seasonally adjusted), indicating a similar pace of slow growth to October. Australian PSI® results above 50 points indicate expansion, with higher numbers indicating stronger rates of growth.
• Four of the five activity sub-indexes in the Australian PSI® were above 50 points and indicating modest growth in November (seasonally adjusted), with one sub-index declining. Only stocks (inventory) (49.3) contracted in November.
• The Australian PSI® showed considerable variation in activity across the sub-sectors in November. Five of the nine sub-sectors expanded in November (trend) while four contracted. Conditions are better in business-oriented sub-sectors than in the consumer-oriented sub-sectors. Activity accelerated in property and business services (59.0). Conditions stayed positive but moderated in personal and recreational services (56.1); wholesale trade (52.8); finance and insurance (52.4 points) and communications services (51.0 points). Contraction was evident in retail trade (46.3) hospitality (44.2), health and community services (43.3 points) and transport and storage (39.7 points).
• Respondents to the Australian PSI® in the business-oriented sub-sectors noted continuing demand from the construction and mining sectors, predominantly in the eastern states. Respondents in retail and hospitality reported weak or hesitant spending by consumers, with some blaming increased household electricity costs. Businesses in Western Australia still appear to be facing tougher conditions than those in the eastern states in November, although stronger signs of improvement are emerging in the west.
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.
