The AIG Performance of Services Index in Australia rose to 52.5 in May 2019 from 46.5 in April. The latest reading pointed to the first expansion in the services activity in 2019, as new orders (+11 points to 55.6); employment (+6.2 points to 52.2); supplier deliveries (+10.2 points to 55.3) and finished stocks (+2.4 points to 51.8) returned to growth. Meanwhile, sales edged down 0.3 points to 48.4. On the price front, selling prices advanced 5.6 points to 47.7, still it remained in contraction territory, whereas input prices went up 1.4 points to 59.4. By industries, both communications (+0.2 to 34.9 points) and transport & storage (-1.5 to 39.9 points) kept shrinking. In contrast, hospitality booked the highest gain (+4.1 to 60.1). Services PMI in Australia averaged 50.21 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 53.00 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 53.00 Index Points in 2020, according to our econometric models.