Australia: Services sector gains steam in August
The Judo Bank Australia Services Purchasing Managers’ Index (PMI) improved to 52.5 in August from 50.4 in July. As a result, the index moved further above the 50.0 no-change threshold, and signaled a faster improvement in services-sector business activity compared to the previous month.
August saw a rebound in both domestic and export new orders, which drove the joint-fastest increase in business activity in four months. Firms attributed this recovery to wider customer bases and business development efforts. In addition, employment rose further in the month, though companies hinted at difficulty finding suitable matches.
Turning to prices, input costs rose sharply at the fastest clip in over a year due to higher wages and transport prices. That said, output charge inflation dropped to its lowest value since July 2021. Lastly, business sentiment improved, reaching its highest level in a year, as firms anticipated better economic conditions.
Matthew De Pasquale, economist at Judo Bank, commented:
“This improvement in key activity indicators may reflect government stimulus (tax cuts and cost-of-living support) working its way into consumer spending. We will look to official data sources over the next few months to confirm this pick-up in household consumption through the September quarter.”