The AIG Performance of Services Index in Australia improved marginally to 44.5 in February 2019 from 44.3 in January, pointing to the second consecutive month of contraction in the services sector since February of 2017. Supplier deliveries (up 10.6 points to 50.9) and finished stocks (up 3.3 points to 55) increased. Also, employment rose 1.8 points to 49.3, still remaining in contraction territory. On the other hand, new orders plunged 6.9 points to 38.5, and sales contracted 1.5 points to 37.8. On the price front, input prices fell 3 points to 60.2 and selling prices 3.6 points to 43.4. Meantime, average wages fell 2.2 points to 53.0 while capacity utilization edged up 1.6 percent to 78.4 percent. Services PMI in Australia averaged 50.24 Index Points from 2003 until 2019, reaching an all time high of 63 Index Points in June of 2018 and a record low of 32.50 Index Points in February of 2009.
Services PMI in Australia is expected to be 44.20 Index Points by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Services PMI in Australia to stand at 51.20 in 12 months time. In the long-term, the Australia Performance Services Index is projected to trend around 52.20 Index Points in 2020, according to our econometric models.