Australia’s services economy dies

The Australian Industry Group (AIG) today released its Performance of Services Index (PSI), which shows that Australia’s services sector is dead as a dodo:

According to AIG, the PSI fell “0.1 points to 31.5 points in June 2020 (seasonally adjusted), indicating another serious contraction in activity in June and at a similar pace to May. This was the second lowest result in the history of this series, following a record low in April (commencing in 2003)”.

As shown below, it is a sea of red ink with all sub-sectors contracting:

Importantly, wages and employment have collapsed:

Alongside sales and new orders:

Whereas spare capacity is at record levels:

Better ramp-up immigration (not!).

Leith van Onselen
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Comments

  1. When does the share market start to represent these graphs in direction..? Inverse relationship with ASX200

  2. Does this include cafes and restaurants? The local smashed avo shops are going bonkers! It’s like there is no recession

    • Perhaps every business is going sh1t right now in data, because every business needs to manipulate all the data in order to claim jobkeeper.

    • People are happy to limit their indulgence on food, but if you look around there are plenty of closed retail stores.

  3. Friend in building renovations – never been busier.
    Friend in civil engineering – cant catch a break
    Jewellery designer – non stop
    Lawyer – overloaded
    Radiologist – no change
    I can go on and on, but the effects of the virus is basically confined to anything related to tourism/travel, bars/restaurants/cafes and arts. Its a weird patchy recession that seems to affect some hard and some its been absolutely fine

  4. Given how these numbers are constructed, this is a horrendous result. Has your business seen increased activity, activity stayed the same or worsened today relative to one month ago. Given the lockdowns it should have surged.

  5. Brahmin Australian

    This needs to be state by state. Life is normal in the west and northern states.

    Melbourne won’t get control of this for 6 months now so a lot of bar and restaurant owners will simply walk away now. They would have been willing to stick it out for 3 months, but not for 9 months total with no guarantee or reopening again after that time.