• The Australian Industry Group Australian Performance of Services Index (Australian PSI® ) rose by 2.9 points to 56.9 points in March 2018 (seasonally adjusted), signifying an acceleration of growth. Australian PSI® results above 50 points indicate expansion, with higher numbers indicating stronger rates of growth.
• March 2018 was the highest monthly result in the Australian PSI® since December 2016 and marks thirteen months of positive results (seasonally adjusted).
• All five of the activity sub-indexes in the Australian PSI® expanded (results over 50 points) in March 2018. Deliveries were robust over the month rising to 61.3 points, as were new orders (59.0). Stocks (55.0) lifted over the month while Sales (55.0) also edged higher. Employment continued to grow rising one point to 54.9 in March, marking ten months of growing employment in the Australian PSI®.
• Capacity utilisation lifted to 78.9% in March, up from 78.0% in February and well above its long-term average of 75.6%. It hit a record high of 81.4% in August 2017.
• The Australian PSI® was positive and indicating expansion across seven of the nine sub-sectors in March (trend), including wholesale; transport & storage; finance; property & business; communication; health; and personal & recreational services. The more business-oriented sub-sectors reported that stronger demand from their customers in construction and manufacturing is benefiting their business activity.
• The two largest consumer-oriented sub-sectors remained slow in March. Hospitality was relatively stable while retail trade contracted again in March (trend). Services businesses in these sub-sectors continue to report restrained discretionary spending among households due to slow nominal income growth and pressure on household budgets from housing, energy and other essential costs.
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.
