For 22 months now the Australian services sector has been contracting according to the Australian Industry Group’s (AiG) Performance of Services Index.
But there is some hope on the horizon with AiG reporting the PSI rose a point to 48.9 in November (50 is the demarcation between contraction and expansion) largely on the back of “an improvement in employment in the sector.”
AiG CEO Innes Willox said:
Confidence appears to be building with the lift in employment in November suggesting more optimistic hiring among services businesses in the lead-up to what is hoped to be a busy Christmas.
There is much hope in improved employment and this is the best result for the PSI since March this year.
Willox thinks he can see some green shoots.
“Over spring we have seen a clear shift in momentum in the services sector following the severe bout of mid-year doldrums,” he said.
“The sector now looks to be clawing its way out of a 22-month long contractionary phase.”
For all the focus on manufacturing and mining, Australia is a service-based economy and a service sector that is expanding means a stronger Australian economy.