The Australian Industry Group Australian Performance of Services Index (Australian PSI®) rose by 2.3 points to 61.0 in April 2021, recording its highest monthly result since October 2003 as the recovery following the COVID-19 recession of 2020 continued to gain strength (results above 50 points indicate expansion, with the distance from 50 points indicating the strength of the increase).
Ai Group Chief Executive, Innes Willox, said: “Australia’s services industry expanded further in April growing at a faster pace than at any time since October 2003. The logistics sector was particularly strong reflecting growth across a wide range of its customer base. Retail trade and hospitality businesses benefitted from the relative success Australia is having on the health front, the easing of distancing and inter-state restrictions as well as the return of greater levels of consumer confidence. Across the services sector sales lifted strongly and employment returned to growth after a flat month in March. As is the case in a number of Australian industries, more service sector employers are reporting difficulties in finding suitably skilled staff. Encouragingly, new orders expanded at very healthy levels once again pointing to the likelihood of further expansion in coming months,” Mr Willox said.
Australian PSI® – Key Findings for April 2021:
All five of the services sectors available in the Australian PSI® indicated expansion in April (2021). Among the business-oriented sectors, surging demand boosted business & property services (up 2.2 points to 56.0) and logistics (up 1.4 points to 64.1), while consumer-oriented sectors continued to recover with the easing of restrictions, improved confidence and delayed spending across previous months.
All five activity indices in the Australian PSI® – sales, new orders, employment, stocks and deliveries – showed positive and improving results in April (2021).
The input prices index rose further in April 2021 (up 5.0 points to 69.7), marking nine months of increases and the highest rate since March 2020, following the index’s record low in June 2020. The average wages index moderated (down 5.1 points to 55.9), indicating tempered wage pressures following a recent high in the summer period. Selling prices also continued to recover – after reaching a series low in June 2020 this index has recovered to a record high in April 2021 (up 3.5 points to 61.4).
Background: The Ai Group Australian PSI® is a leading indicator of services activity in the Australian economy. It is a seasonally adjusted national composite index based on the diffusion indices for sales, orders/new business, deliveries, inventories and employment with varying weights. An Australian PSI® reading above 50 points indicates that services activity is generally expanding; below 50, that it is declining. The distance from 50 is indicative of the strength of the expansion or decline. Results are based on a sample of around 200 companies each month.
Source: Ai Group