Australia’s services industry expanded at a slower pace last month as global financial turmoil weighed on hiring plans and new orders, a private survey showed.
The performance of services index dropped 1.8 points to 50.3 in September from a 16-month high of 52.1 in August, Commonwealth Bank of Australia and the Australian Industry Group said in Sydney today. Fifty is the dividing line between expansion and contraction.
The Reserve Bank of Australia yesterday left its benchmark interest rate unchanged at 4.75 percent, citing a “softer” labor market and consumers who are “more concerned about the possibility of unemployment rising.” The RBA also signaled less concern about wage pressure from a mining investment boom.
“Consumer related sectors such as retail and personal services weakened as shell-shocked consumers exercised caution,” Commonwealth Bank senior economist James McIntyre said in a statement. “Conditions in business-related sectors such as property and business services, and transport and storage were stronger, as the mining boom benefits trickle through the economy.”
The index’s gauge for sales rose to 52.2 from 51.2, and the reading for new orders fell to 50.7 from 53.9. The wages indicator sank to 62.2 from 66.7, the report showed. The employment measure declined 4.3 points to 47.8.
Today’s report, 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.