September 3, 2010The gradual withdrawal of fiscal stimulus and uncertainty surrounding the national political landscape saw the services sector remain sluggish in August.
The latest seasonally adjusted Australian Industry Group/Commonwealth Bank Australian Performance of Services Index rose slightly to 47.5 last month, remaining below the critical 50 point level for the fourth consecutive month.
The accommodation, cafes & restaurants sub-sector was flat in August while retail trade contracted once again.
The expansion in activity in communication services, wholesale trade and finance & insurance, largely due to employment growth, was not enough to lift the sector's overall performance.
A slump in supplier deliveries and selling prices particularly impacted personal & recreational services and health & community services.
Ai Group Chief Executive Heather Ridout says the continuing weak performance of the services sector reinforces the group's view of the ongoing patchiness of the recovery in the broader economy.
“Although there are some promising signs among the services sub-sectors, the sector as a whole is yet to feel the full benefits of the gradual re-emergence of private sector demand," Ridout says.
