Services PMI for Australia, April from the Australian Industry Group
Up on the month to 49.7 from 49.5 prior
Still in 'contraction' though (for the 2nd consecutive month)
Key points from AiG:
- Of the five of activity sub-indexes, only new orders (51.9 points) and deliveries (51.5 points) expanded in April. Sales remained largely stable (49.7 points) while stocks deteriorated further (45.9 points) and employment fell again (48.1 points) in April. The expansion in new orders and deliveries is a positive indicator for conditions ahead, yet employment conditions remain weak.
- Five of the nine services sub-sectors were stable or expanded in April (three month moving averages). The strongest subsectors in April were finance & insurance (60.7 points) and health & community services (54.2 points). Retail trade improved from last month's contraction and expanded (52.8 points) while transport & storage services improved from contraction to stable (49.3 points), as did property and business services (49.5 points). Wholesale trade (45.4 points), communication services (45.7 points) and personal and recreational services (45.5 points) went from expansion to contraction in April.
- The results indicate that the large services sector is still facing very mixed conditions.
- The input costs (62.5 points) and wages (57.8 points) sub-indexes remained in expansion in April while selling prices stabilised from contraction (49.9 points). This indicates that margin pressures continue for services businesses.
- Respondents also noted softer economic conditions (particularly in some regional areas), uncertainty around the upcoming Federal budget and election, growth due to infrastructure programs in eastern states and some adverse effects from the strengthening dollar
