Australia's Services Sector Contracted In April At Its Fastest Rate Since December 2012

Photo/Mark Metcalfe

Australia’s services sector has contracted again, on weak business confidence, cuts in government spending and a slow down in the mining sector.

That’s according to the latest Australian Industry Group/Commonwealth Bank Australian Performance of Services Index, which was down 5.5 points to 44.1 in April.

Readings below 50 represent a contraction in activity with the distance from 50 indicative of the strength of the decrease.

“The fall in the April Australian PSI was largely driven by the weakness in business-related services,” said Australian Industry Group boss Innes Willox.

“The result highlights the low levels of business confidence; the impact of actual cuts in government spending; and fears of further spending cuts in the coming federal budget.

“As well, the slow-down in the mining sector and continuing weakness in large parts of manufacturing and construction are detracting from activity across the economy,” he said.

Commonwealth Bank Senior Economist John Peters said it was not surprising businesses continued to struggle against the high Australian dollar and both the Federal and state governments reluctance to spend money.

Read the full findings here.

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