Good economic news from the Australian Industry Group (AiG) this morning, with the release of their Performance of Services index which showed a big leap back into expansion territory with a rise of 5.8 points to 55.2.
What’s incredible about this result — and also encouraging — is that AiG said it was the first expansion since “January 2012 and the highest reading since March 2008.”
But keep this in mind: while all sectors are now expanding, the result was still driven largely by “health and community services (67.7 points) and finance and insurance (67.0 points).”
Feedback from respondents in many services sector indicates that local demand conditions remain challenging for a large number of services businesses and the outlook continues to be fragile for them.
So there is some really good economic news in this release, particularly in the pick up in the employment sub index which expanded 4.2 points to 52.7.
But Innes Willox, AiG CEO said: “We are still somewhat short of a full recovery with expansion confined to a couple of sectors and with businesses in other sectors reporting ongoing weakness”