Australian PSI®: New orders lift services sector in August
Innes Willox, Chief Executive of the national employer association Ai Group, said: “Services remained in expansion in August, pointing to the overall resilience of the sector with sales, employment and new orders all higher than in July. Performance varied within the sector. The retail & hospitality and health, education & community sectors both improved significantly and logistics lifted into expansion in August. In contrast, personal, recreation & other services and business & property services both contracted. Price and wages pressures continued into August although the pace of increase in input prices eased somewhat. With service businesses highlighting interest rates as a key area of concern, the Reserve Bank’s decision yesterday to raise the cash rate by another 50 basis points to 2.35% will further fuel their fears of a fall in spending in the months ahead,” Mr Willox said.
Australian PSI® – Key Findings for August 2022:
- The Australian PSI® indicated mild growth in the services sector in August, following mild growth in July.
- Consumer-oriented sectors generally fared better in August. Retail trade & hospitality improved as did health, education & community services.
- Three of the services activity indicators were positive and improved – reflecting pockets of resilience – two contracted.
- Services capacity utilisation rose to 83.7%, the highest result since May 2021.
- Customer demand in some sectors remains robust, but labour shortages and concerns that future demand will decline were key themes for businesses.
|
Seasonally adjusted |
Index this month |
Change from last month |
12- month average |
Seasonally adjusted |
Index this month |
Change from last month |
12- month average |
|
Australian PSI® |
53.3 |
1.6 |
50.2 |
Business-oriented services |
|||
|
Sales |
51.9 |
2.6 |
50.7 |
Business & property |
46.2 |
-7.2 |
50.7 |
|
Employment |
53.2 |
0.8 |
50.5 |
Logistics |
51.1 |
4.8 |
47.9 |
|
New Orders |
57.3 |
6.7 |
50.9 |
Finance & insurance |
na |
na |
na |
|
Supplier deliveries |
46.8 |
-0.8 |
48.8 |
||||
|
Finished stocks |
56.9 |
-7.8 |
49.1 |
Consumer-oriented services |
|||
|
Capacity utilisation (%) |
83.7 |
3.4 |
76.7 |
Retail trade & hospitality |
63.1 |
5.8 |
48.0 |
|
Prices and wages |
Health & education |
57.5 |
13.1 |
51.9 |
|||
|
Input prices |
68.7 |
-5.6 |
64.3 |
Personal, recreational & other |
45.8 |
-16.1 |
53.1 |
|
Selling prices |
61.2 |
-2.2 |
49.7 |
||||
|
Average wages |
67.6 |
-1.3 |
57.5 |
Australian PSI® (trend) |
50.4 |
-0.6 |
50.1 |
Results above 50 points indicate expansion. Data is seasonally adjusted; trend data in the Australian PSI® calculated with a Henderson 13-month filter formula.
na: Results are not available for this sector in this period due to unusually low survey response numbers. All sectors are included in the total results.
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Background: The Ai Group Australian PSI® is a leading indicator of services activity in the Australian economy. It is a seasonally adjusted national composite index based on the diffusion indices for sales, orders/new business, deliveries, inventories and employment with varying weights. An Australian PSI® reading above 50 points indicates that services activity is generally expanding; below 50, that it is declining. The distance from 50 is indicative of the strength of the expansion or decline. Results are based on a sample of around 200 companies each month.
Media Enquiries: Tony Melville: 0419 190 347
