The Australian Industry Group Australian Performance of Services Index (Australian PSI® ) rose 0.3 points to 52.5 points (seasonally adjusted), indicating mild growth in September 2018. Results above 50 points indicate expansion, with higher numbers indicating stronger growth rates.
• The Australian PSI® has been broadly stable or expanding for two years. It has indicated positive conditions (results above 50 points) for the past nineteen months. • Four of the five activity sub-indexes in the Australian PSI® were positive (results over 50 points) and one was broadly stable in September 2018.
• Inventories eased in September, while deliveries accelerated. New orders continued to grow and at a slightly faster pace than August. Sales returned to almost the same modest growth result as the previous month while employment continued to be mostly stable across the services sector in September.
• Capacity utilisation in the Australian PSI® eased by 1.1 percentage points to 77.4% of available capacity in September. It remains slightly above its long-run average of 75.9% of total capacity across the services sector.
• The Australian PSI® indicated expansion in seven of the nine sub-sectors in September (trend). Business-oriented sub-sectors such as property & finance reported steady demand from construction projects, although transport & storage businesses noted a continued contraction in business activity. Health, retail trade, wholesale trade and hospitality also reported positive results in September.
Still growing but employment turned negative and the leading indicator is coming off fast:
The boom is over. Next comes the fade. Full report.
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.
