The Ai Group Australian Performance of Services Index (Australian PSI®) fell by 8.6 points to 49.2 points (seasonally adjusted) in May 2022 indicating mild contraction and a deterioration from the strong results seen in recent months. Results below 50 points indicate contraction in the Australian PSI®, with lower numbers indicating a stronger rate of contraction.
- The Australian PSI® indicates the services sector fell into contraction in May, for the first time in six months.
- Uneven dynamics are affecting the sector. Business & property and health & community services significantly down, but logistics, retail & hospitality and personal services up.
- All services activity indicators were stable or mildly contractionary, reflecting a moderation of the strong results in the past two months.
- Services capacity utilisation remained at 82.3%, an all-time high for this series. Businesses report plans to increase capacity.
- Staff shortages, rising input prices and ongoing difficulties sourcing stock continue to constrain activity, but there are some signs of supply constraints easing in pockets of the services sector.