Australian industry Group Performance of Service Index
Not quite as big a jump as the manufacturing PMI fro AiG on Monday, but not too shabby!
The key points from AiG (bolding mine):
- Third consecutive month of expansion
- A stronger rate expansion in activity across the services sector
- Of the five activity sub-indexes, sales (59.4 points) lifted by 6.6 points in July, the strongest reading since August 2015. Deliveries (54.5 points) rose by 6.0 points and stocks (52.8 points) gained 6.2 points. New orders (52.2 points) were steady (up 0.4 points from June), while Employment (50.0 points) dropped by 3.1 points, indicating stable employment in July
- Three of the nine services sub-sectors expanded in July (in three month moving averages) and two were stable. Retail trade (65.0 points); finance and insurance (62.0 points) and communication services (53.2 points) expanded in July. The very large health & community services (50.2 points) and property & business services (49.1 points) sub-sectors were stable in July. Wholesale trade (48.9 points), personal & recreational services (46.7 points), hospitality (40.3 points) and transport & storage (33.6 points) all contracted, with transport services recording its weakest conditions since 2013.
- The input costs (55.3 points) sub-index by 8.0 points in July, suggesting prices continued to increase but at a slower pace than in June (possibly due to Australian dollar fluctuations). Selling prices (52.4 points) went up in July, for the first time since October 2015, while wages (49.4 points) were roughly stable in July.
- Respondents noted that the uncertain period leading up to the Federal election on 2 July may have had a lingering dampening effect on business activity in July. For retailers, an unusually cold and wet winter is a proving to be a positive influence on winter sales.
My notes:
- Selling prices higher for the first time since October 2015 may be a sign to higher inflation figures to come
- Employment in the services sector is weakening a little
- Winter sales benefitting from the weather .... not the weather again!
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Note, the PMIs are not usually immediate market movers in Australia, and if there is a focus it is on the manufacturing PMI (we got this on Monday), even though the services sector is bigger. Go figure.