Service sector activity expands in August

Prashant Mehra | 05 Sep 2017

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SYDNEY - [AAP] Australian services sector activity has continued to expand for the sixth straight month, but the rate of expansion has slowed.

The Australian Industry Group's Performance of Services Index (PSI) fell 3.4 points to 53.0 points in August, but stayed above the 50-point level signifying expansion.

Ai Group chief executive Innes Willox said positive momentum continued in the sector as a whole, although there was greater variation in activity across the sub-sectors.

"Sales, new orders and employment all lifted in August and the capacity utilisation measure recorded its highest-ever level," Mr Willox said.

"On the wages and prices front, wages and input prices both rose further in August while consumer inflation remained subdued with selling prices falling in the month."

Four of the five activity sub-indexes continued to expand in August, despite several showing a slip in the rate of expansion.

Sales were down 6.8 points to 53.5, new orders fell 1.0 point to 54.2 and employment dropping 4.4 points to 52.5, but stocks built up at a faster rate, up 4.1 points to 54.9.

Activity in retail trade was down 1.1 point to 42.1 and hospitality was 4.5 points lower at 38.5, showing that both had fallen further into contraction.

Input prices accelerated slightly, up 0.4 points to 59.3, mainly on the back of high energy cost pressures across almost all sub-sectors, while the sub-index for selling prices indicated falling prices for a second month, dropping 1.6 points to 47.5.

The wages sub-index rose 2.6 points to 57.7.

 

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