AIG Performance of Services index for October
Uh-oh ... slips back into contraction
Down 3.3 points from last month to 48.9
Key points from AiG:
- Mild contraction after four months of expansion
- Other than this interruption, conditions across the services sectors have been mostly positive in 2015
- The three-month average still indicates expansion, at 52.3 points in October
- Two of the five activity sub-indexes above 50 in October; sales and supplier deliveries
- Services employment contracted for a second month
- Both new orders and stock levels fell this month
- Six of the nine services sub-sectors grew in October. This suggests positive trading conditions are becoming more broad-based. Conditions still vary significantly across sub-sectors, with ongoing weakness in communications and wholesale trade
- Respondents indicated that a lower Australian dollar and low interest rates are benefitting local tourism, retail and other consumer services. Solid housing market activity continues to benefit a range of household services in NSW and to a lesser extent elsewhere. More business-to-business oriented sub-sectors are showing tentative signs of growth, although a lack of appetite for investment is dampening on demand for their services
- The extra public holiday in Victoria for the first time in October this year, which was confirmed at short notice, disrupted activity across a range of consumer and business services nationally. The disruption was compounded due to the timing of this new holiday, just before public holidays in other states the following week
The FX market doesn't pay much attention to the services PMI
