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Australian PSIĀ®: Services edge ahead in November

The Australian Industry Group Australian Performance of Services Index (Australian PSI®) increased by 0.6 points to 51.1 in November, continuing a gradual lift into growth following a sluggish period for the sector (results above 50 points indicate expansion, with the distance from 50 points indicating the strength of the expansion).

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Ai Group Chief Executive, Innes Willox, said: "The small lift in the pace of expansion in the services sector is encouraging although it remains well short of a convincing rebound from its recent slump. Both employment and new orders grew solidly in November while sales across the sector slipped. There was mixed news from different parts of this diverse sector. Personal & recreational services grew strongly while health & community services continued a respectable pace of expansion. On the other hand, hospitality services slumped again in November as did retail and transport & storage businesses. The patchiness across the sector remains of concern and service providers will be looking for further momentum in the pre-Christmas period to provide a strong base for a firmer lift in the early part of 2017," Mr Willox said.

Australian PSI® – Key Findings for November:

  • Three of the five activity sub-indexes in the Australian PSI® expanded in November, with new orders lifting 1.7 points to 54.0, employment relatively steady (down 0.6 points) at 52.3 and deliveries rising into positive territory (up 3.6 points to 51.8). Sales slipped back into contraction (down 3.0 points to 48.1).
  • Four of the nine services sub-sectors in the Australian PSI® expanded in November (three-month moving averages*): health & community services (down 0.4 points to 53.3); personal & recreational services (up 4.4 points to 57.7); finance & insurance (up 1.9 points to 52.2); and property & business services (up 1.5 points to 51.4).
  • The transport & storage services sub-sector continued to contract but at a slower pace, improving by 9.0 points to 44.5.
  • Input prices continued to rise in November and at a faster rate (up 1.4 points to 63.1), while wages increased for a fourth month (up 3.7 points to 58.7 – its highest reading over the past year). The selling prices sub-index fell back 4.0 points to 46.1, with margin pressures intensifying.  

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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®

51.1

0.6

49.8

Supplier Deliveries

51.8

3.6

49.4

Sales

48.1

-3.0

50.7

Input prices

63.1

1.4

61.1

New Orders

54.0

1.7

51.3

Selling Prices

46.1

-4.0

48.4

Employment

52.3

-0.6

48.7

Average Wages

58.7

3.7

53.1

Stocks

47.0

5.3

47.3

Capacity Utilisation (%)

77.4

1.1

76.5

* All sub-sector indexes in the Australian PSI® are reported as three-month moving averages (3mma), so as to better identify the trends in these volatile monthly data.

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