AIG Services Index The Australian Industry Group Australian Performance of Services Index (Australian PSI) rose 4.0 points to a record high of 63.0 in June, extending its run of positive conditions to a 16th month (results above 50 points indicate expansion, with the distance from 50 points indicating the strength of the increase).
Ai Group Chief Executive, Innes Willox, said: "The Australian services sector continued a run of strong growth in June on the back of further gains in sales and employment and an encouraging rise in new orders. The pace of wage rises and price growth for non-labour inputs was maintained in June, reflecting the 21-month duration of the current expansionary phase which has also seen an increase in the number of businesses reporting difficulties sourcing skilled employees. The more business-orientated sub-sectors such as property, finance and transport were particularly buoyant, reporting healthy demand from customers working in manufacturing and infrastructure while sectors more reliant on discretionary household spending – such as retail and hospitality – were less likely to report positive conditions," Mr Willox said.
Australian PSI – Key Findings for June:
- All five activity sub-indexes in the Australian PSI expanded in June (see table below). New orders returned similar results to May (up 0.7 points to 65.7) while sales moderated slightly but remained elevated (down 0.2 points to 59.9). Supplier deliveries were strong (up 8.8 points to 64.8) while inventories climbed into growth (up 13.7 points to 59.1).
- Employment marked 13 months of expansion, accelerating a further 4.7 points to 63.9, with the business-oriented sub-sectors indicating stronger demand for labour.
- Six of the nine services sub-sectors expanded in June (trend). Predominantly business-oriented sub-sectors such as property (up 1.9 points to a record high 67.9), finance (up 1.9 points to 67.1) and transport (down 1.9 points to 61.2) reported solid demand from customers in construction and manufacturing, while the health sector also reported positive results (up 1.4 points to 62.0).
- The more discretionary consumer-oriented sub-sectors remained relatively weak in June, with retail trade contracting again (up 1.8 points to 48.4) while hospitality was stable after 13 months of contraction (up 2.5 points to 50.2).
- Capacity utilisation dropped 0.6 points to 81.3% of all available capacity in June, still well above its long-term 2018 average of 75.8. This suggests an increasing number of businesses have low spare capacity and will soon need investment to expand.
- The input prices sub-index eased 0.2 points to 66.6, while wages lifted slightly (up 0.4 points to 65.0). Selling prices returned the same result as May (52.9 points) – a sixth consecutive month in which respondents have reported an increase in their selling prices.
|
Index this month |
Change from last month |
12 month average |
Index this month |
Change from last month |
12 month average |
||
|
Australian PSI® |
63.0 |
4.0 |
55.0 |
Supplier Deliveries |
64.8 |
8.8 |
54.7 |
|
Sales |
59.9 |
-0.2 |
54.5 |
Input Prices |
66.6 |
-0.2 |
61.5 |
|
New Orders |
65.7 |
0.7 |
56.0 |
Selling Prices |
52.9 |
0.0 |
50.3 |
|
Employment |
63.9 |
4.7 |
55.6 |
Average Wages |
65.0 |
0.4 |
58.3 |
|
Stocks |
59.1 |
13.7 |
52.4 |
Cap. Utilisation (%) |
81.3 |
-0.6 |
79.7 |
* All sub-sector indexes in the Australian PSI are reported in trend terms (Henderson 13-month filter), to better identify the trends in these volatile monthly data.
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