Services sector stronger on Santa rally

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Well it seems we all had a good Christmas as the AIG released its latest PSI indicating that in December, the services sector grew once again making good on its gains in 2017.

Here are the details:

The Australian Industry Group Australian Performance of Services Index (Australian PSI® ) lifted by 0.3 points to 52.0 in December (seasonally adjusted), indicating a marginal acceleration in growth from November. Australian PSI® results above 50 points indicate expansion, with higher numbers indicating stronger rates of growth.

Of the five activity sub-indexes in the Australian PSI® , new orders, employment and supplier deliveries expanded (results over 50 points), stocks (inventories) were roughly stable and sales contracted.

Respondents to the Australian PSI® in the business-oriented sub-sectors noted continuing demand from their construction and mining customers, but limited pricing flexibility due to strong competition. Respondents in the retail and hospitality subsectors reported weak or hesitant customer spending due to cost of living pressures.

Interestingly the retail sector remains under pressure:

With selling prices continuing to contract, indicating a lack of inflation as prices continue to flat line. 

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The full release is available here in PDF form.