Australia Services Industry Grows for First Time in Five Months

Australia’s services industry expanded in April for the first time in five months as increased demand from mining companies prompted a gain in employment.

The performance of services index gained 3.4 points to 52.3 from March, Commonwealth Bank of Australia and the Australian Industry Group said in Sydney today. A figure above 50 indicates the industry is growing.

The report adds to evidence of an economic recovery that prompted central bank Governor Glenn Stevens to boost borrowing costs yesterday for the sixth time in seven meetings. Services companies reported a gain in new orders for the first time in five months, today’s report said.

The “pickup is encouraging after the weak start to the year,” said Australian Industry Group Chief Executive Heather Ridout. “The strongest performing sub sectors included transport and storage, communications, and property and business services.”

Weakness “remains evident” among companies focused on consumers, such as retailers and hoteliers, Ridout said. “The run of interes-rate increases starting in October is clearly impacting on these sectors and yesterday’s rate rise will not be welcomed,” she 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.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE