The Australian Industry Group Australian Performance of Services Index (Australian PSI® ) fell by 1.7 points to 55.2 points in April 2018 (seasonally adjusted), signaling a slight deceleration from March. Australian PSI® results above 50 points indicate expansion, with higher numbers indicating stronger growth rates.
• The Australian PSI® has indicated positive conditions (results above 50 points) in every month since March 2017. It last fell below 50 points in Feb 2017 (49.0 points).
• Four of the five activity sub-indexes in the Australian PSI® expanded (results over 50 points) in April 2018. Employment continued to grow, with this sub-index rising by 3.7 points to 58.6 in April and indicating 11 months of expanding employment in the Australian PSI® . New orders grew more slowly in April than in March (down by 2.7 points to 56.3 points, while sales were robust (up by 0.8 points to 55.8 points). Inventory build-ups decelerated (down by 2.8 points to 52.2 points) in April, as supplier deliveries contracted (48.7 points).
• Capacity utilisation hit a record high in April, rising to 82.4% of all available capacity.
• The Australian PSI® was positive and indicating growth across seven of the nine sub-sectors in April (trend). The more business-oriented sub-sectors reported increasing demand from their customers in construction and manufacturing.
• The more discretionary consumer-oriented sub-sectors remained weak in April. Retail trade contracted again in April, as did hospitality (trend). Businesses in these sub-sectors continue to report restrained discretionary spending from households due to rising energy and other household costs and changing consumption patterns.
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.
