Australia's services industries continue to struggle through a difficult period of pandemic-related closures and restricted activity, with the Australian Industry Group Australian Performance of Services Index (Australian PSI®) plunging 11.6 points to 27.1 in April – both the largest single monthly fall and the lowest result in the history of the series (results below 50 points indicate contraction, with the distance from 50 points indicating the strength of the decrease).
Activity restrictions in response to the COVID-19 pandemic have decimated large segments of Australia's services industries. The Australian PSI® indicated contraction in all sectors in April (trend). This was the first full month of restrictions on commercial activity including closures or limited trading for many businesses in hospitality, retail, transport, recreation, personal services, education and even community services.
Reduced customer demand was evident for most businesses across the sectors included in the Australian PSI®. The few businesses who reported positive results for the month included: those who supply personal protective equipment and other hygiene products; ICT businesses who note increased demand for business services; and those who deliver contracts that were already underway and were not affected by COVID-19 restrictions in April.
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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.
