Performance of Services Index - January 2020

January 2020 - OVERVIEW

Slow start to the year for services

The Australian Industry Group Australian Performance of Services Index (Australian PSI®) fell by 1.3 points to 47.4 points in January 2020 (seasonally adjusted). This was the second month of decline for Australia’s services industries following better conditions in the second half of 2019. Results below 50 points indicate contraction in the Australian PSI® with lower numbers indicating a stronger pace of decline.

Respondents to the Australian PSI® said consumer demand and business conditions were disrupted this summer by bushfires and subsequent smoke pollution, on top of ongoing drought in many locations. These factors are affecting consumer sentiment and discretionary spending nationally.

The Australian PSI® indicated expansion in three services sectors and contraction in three sectors in January (trend). Among the business-oriented sectors, finance & insurance and logistics (wholesale trade & transport) reported positive results, while business & property services contracted. Among the consumer-oriented sectors, ‘personal, recreational and other services’ reported positive conditions while ‘health, education & community services’ and ‘retail trade & hospitality’ contracted slightly in January.

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