The AIG Performance of Services Index in Australia rose to 46.5 in April 2019 from 44.8 in March. The latest reading pointed to the weakest contraction in services activity in four months, as new orders (+2.3 points to 44.6); sales (+10.2 points to 48.7) and finished stocks (+4.6 points to 49.4) increased, still remaining in negative territory. Meanwhile, employment (-6.2 points to 46) and supplier deliveries (-1.8 points to 45.1) dropped. On the price front, input prices went down 1.0 points to 58.0 and selling prices fell 2.7 points to 42.1. Average wages plummeted 10.9 to 48.2 to stand way below its 12-month average of 59.0. Communications and retail trade posted the weakest sector prints at 28.9 and 37.7 points, respectively. Services PMI in Australia averaged 50.20 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 53.87 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 51.60 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.