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Free AccessAustralia AI Group Services Sector Index Expands for 5th Month
--Retail Contracts Further; Selling Prices Below 50.0
--Finance and Insurance Expand to Highest in 14 Months
SYDNEY (MNI) - From AI Group Performance of Services Index (Australian PSI)
for July published Thursday.
July Change Over June
--------------------------------------------
Australian PSI 56.4 +1.6
Sales 60.3 +5.6
New Orders 55.2 -3.7
Employment 56.9 +3.7
Stocks 50.8 -0.5
Supplier Deliveries 54.5 +1.4
Input Prices 58.9 -0.4
Selling Prices 49.1 -2.9
Average Wages 55.1 -1.2
Capacity Utilization 78.2 +1.2
FACTORS: The services index expanded for a fifth consecutive month --
reaching its highest this year as sales and employment grew at a stronger pace.
The expansion was more broad-based in trend terms compared with June. Six of the
nine subsectors were above 50.0. Employment rose 3.7 points to 56.9 -- the
strongest monthly result since May 2015. Supplier deliveries rose for two months
of expansion while the rise in new orders moderated but still suggested more
growth this year. The increase in input prices moderated as did wages growth but
selling prices fell at a faster pace and into contraction. Among subsectors
retail trade contracted for the fourth consecutive month but wholesale improved
marginally. The very large finance and insurance subsector index rose by 2.8
points to 59.6 points -- the highest monthly result in 14 months. This subsector
includes banking, insurance, superannuation and financial advisory services.
TAKEAWAY: The growth in the services industry continues to be driven by
business-to-business services and while some businesses are seeing an
improvement in consumer confidence it doesn't seem to be translating into better
conditions or sales in retail. The contraction in retail trade and selling
prices are negatives from the latest survey and may offset the positive effect
of the overall expansion in services. In the latest cash-rate statement the
Reserve Bank of Australia said a source of uncertainty for the domestic economy
is the outlook for consumption. The contraction in retail trade shows how those
concerns are unlikely to fade soon.
COMMENTS: AI Group Chief Executive Innes Willox said high energy costs were
negatively affecting business margins in 2017. "At near $0.80 cents, and
possibly rising, the higher dollar could soon start to bite into margins and
into demand for local goods and services as well."
--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com
[TOPICS: MTABLE,MALDS$,MMLRB$,M$A$$$,M$L$$$,MT$$$$]
To read the full story
Sign up now for free trial access to this content.
Please enter your details below.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.