• The Australian Industry Group Australian Performance of Services Index (Australian PSI® ) fell 1.4 points to 52.2 points (seasonally adjusted), indicating slowing growth in August 2018 compared to July. Results above 50 points indicate expansion, with higher numbers indicating stronger growth rates.
• The Australian PSI® has indicated positive conditions (results above 50 points) for eighteen months. It has been broadly stable or expanding for twenty-three months.
• Four of the five activity sub-indexes in the Australian PSI® were positive (results over 50 points) and one was stable in August 2018.
• Inventories accelerated in August, while sales moderated but continued to expand. New orders continued to grow but at a slower pace. Supplier deliveries grew in August in the Australian PSI® , reversing the contraction seen in July. Employment was stable over the month following fourteen months of continuous expansion.
• Capacity utilisation in the Australian PSI® fell 1.7 percentage points to 78.5% of available capacity in August. It remains above its long-run average of 75.8%.
• The Australian PSI® indicated expansion in five of the nine sub-sectors in August (trend) however results were mixed. Some business-oriented sub-sectors such as property & finance reported steady demand from customers servicing mining and infrastructure projects, however transport & storage businesses noted a slowing in business activity. Health, retail trade and wholesale trade also reported positive results, while other consumer-oriented sub-sectors had deflated results. Personal & recreational services was broadly stable over the month while hospitality contracted (trend).
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.
