Australia’s service sector activity was nearly flat last month implying jobs growth will remain weak for the near term.
The Australian Industry Group’s Performance of Services Index (PSI) slumped 5.5 points to a level of 49 points in February, falling below the 50-point level signifying expansion.
Ai Group chief executive Innes Willox said services sector held its ground in February after a three-month period of gradually rising growth.
“Sales and employment in the sector slipped below their January levels while new orders for services were broadly unchanged,” he said in a statement.
Mr Willox said there was a clear mix of results across the diverse sector last month, with different subsectors in expansion or contraction.
“With services such an important employer, more robust growth across the sector is central if there is to be a pick-up from the still weak levels of jobs growth across the broader economy,” he said.
Ai Group said supplier deliveries was the only one of the five activity sub-indexes to expand in February, at 53.7 points in the month.
Sales, new orders, inventories and employment were either flat or in contraction in the month.
Six of the nine services sub-sectors expanded in the month, led by wholesale trade, and finance and insurance.
The hospitality sub-sector, which has been either flat or contracting for 15 months, fell a further 2.1 points to 41.8 points.
Communications services and transport and storage services also contracted in February.
Input prices continued to rise and wage growth also improved, albeit at a slower pace, while selling prices fell from a flat level into contraction.