Australian Industry Group Performance of Services Index

AiG's highlights of the 'key findings':

  • The highest monthly result for the services sectors since May 2007
  • Sustained the lift into growth seen in November, following three months of stability or contraction
  • All five activity sub-indexes were above 50 points and indicate expansion in December
  • Sales jumped 14 points in December, up to 62.1 points from 48.1 in November. New orders rose by 6.4 points to 60.4 points. Stocks lifted 5.7 points to 52.6 points, growing in ten out of the past eleven months. The employment subindex picked up the pace, growing by 4.3 points to 56.6 points.
  • Six of the nine services sub-sectors expanded in December (three month moving averages).
  • Personal & recreational services lifted by 5.2 points to 63.0 in December, its highest result since March 2012. Finance & insurance grew steadily, lifting 7.7 points over the month to 59.9 points. Property & business services rose by 2.8 points to 54.2 points. The very large health & community services sub- sector grew at a slightly slower pace, falling by 1.5 points to 51.7 points in December. 
  • A number of respondents to the Australian PSI® noted that conditions were more positive in December with: customer demand strengthening; increased orders from the mining sector; a lower value for the Australian dollar; interest rates remaining stable and (for regional services) good agricultural harvests. Overall, there was a sense of increased confidence from respondents across many services sub-sectors.

So, a smashing result for services PMi in December. The focus tends to be on manufacturing, pretty much globally not just in Australia. Services are a much bigger part of the economy, though, (most Australian's work in the services sector) so today's result is welcome good news again for the economy. Sales, employment and new orders all up strongly in this survey.

If you're a bit out of touch, Q3 GDP was negative in Australia, with most analysts (a large majority) saying the Q4 is going to be much stronger and thus Australia should easily avoid a recession. I've been wary on that take, initial Q4 data has not been on the strong side but I have an open mind and am keen on seeing more data as it comes in coming weeks and months. The manufacturing and services PMIs for December have both been on the improve. Good news.

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On Tuesday we got another solid result: Australia - Manufacturing PMI for December: 55.4 (prior 54.2)