Australia's Services Industry Shrinks at a Slower Pace as Companies Hire

Australia’s services industry shrank in August at a slower pace as companies increased hiring to meet demand for communication services.

The performance of services index rose 0.9 points to 47.5 from July, Commonwealth Bank of Australia and the Australian Industry Group said in Sydney today. A figure below 50 indicates the industry is contracting.

Australia’s central bank Governor Glenn Stevens will keep the benchmark interest rate unchanged next week for a fourth straight month to support the economy on concern that global growth may be slowing, according to a Bloomberg News survey. A report published this week showed the domestic economy expanded the most in three years last quarter.

“Although there are some promising signs among the services sub-sectors, the sector as a whole is yet to feel the full benefits of the gradual re-emergence of private sector demand,” Australian Industry Group Chief Executive Heather Ridout said.

Today’s report, which is based on a poll of about 200 companies, is similar to the U.S. non-manufacturing ISM index.

The report measures sales, new orders, deliveries, inventories and employment for companies such as banks, real estate agents, insurers, restaurants, transport firms and retailers to compile the overall performance of services index.

To contact the reporter for this story: Jacob Greber in Sydney at jgreber@bloomberg.net

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