Service sector grows for second month

(Australian Associated Press)

Australia’s services sector has ended the financial year on a positive note by expanding for a second month despite political uncertainty.

The Australian Industry Group’s Performance of Services Index (PSI) fell 0.2 points to 51.3 in June.

A number above 50 indicates the sector is growing, but the lower number shows the expansion was at a slower pace.

“While the election outcome remains uncertain, it is clear that more widespread growth across the sector is needed to put the rebalancing of the economy on a firmer footing,” Ai Group chief executive Innes Willox said.

As vote counting resumes after Saturday’s knife-edge election, global ratings agencies have warned that Australia’s prized AAA credit rating could be at risk if political paralysis damages the government’s capacity to manage budget deficits.

The PSI survey showed that sales, employment and new orders all lifted in the month.

Mr Willox said the gains were concentrated in the retail and finance and insurance sub-sectors, with the remainder of the industry either treading water or shrinking.


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