Financial News: Australia Services Activity Logs Fastest Growth In A

Australia Services Activity Logs Fastest Growth In A Year; Retail Sales Rise

(RTTNews) - Australia's services activity grew the most in a year in April and growth in retail sales doubled in March driven by the combined growth in the food-related spending, separate data showed Wednesday. The Judo Bank Australia services Purchasing Managers' Index rose sharply to 53.7 in April from 48.6 in March, survey data from S&P Global revealed. A score above the neutral 50.0 indicates expansion. The rate of services activity growth was the fastest in a year and also above the seven-year survey average. The latest expansion was led by consumer services. Four in five sectors registered growth in April.

Data published by the Australian Bureau of Statistics showed that retail sales grew 0.4 percent in March from February when turnover was up 0.2 percent.

Food retailing advanced 1.0 percent and cafes, restaurants and takeaway food services grew 1.5 percent.

"Businesses in cafes, restaurants and takeaway food services are passing on their rising costs to consumers through price rises, while also benefiting from strong demand driven by the continued return of large-scale cultural and sporting events," ABS head of retail statistics Ben Dorber said.

On a yearly basis, retail sales increased 5.4 percent in March, which was weaker than the 6.4 percent gain in February.

New business in services increased in April but it was weaker than the long-run survey average, PMI survey showed. New export business grew more sharply than total new work, driven in part by higher tourism.

At the same time, outstanding business decreased for the tenth consecutive month though the rate of decline was the slowest in 2023 so far. Employment in the service sector increased for the twentieth straight month and at the fastest pace since June 2022.

Although firms expect higher activity over the coming year, confidence among service providers remained the lowest in the survey history. Companies cited higher interest rates, rising living cost and skill shortages are reasons for weaker outlook.

On the price front, the survey showed that input price inflation slowed to an 18-month low but stayed above the long-run survey average. Meanwhile, the overall rate of charge inflation was the joint second-weakest in over two years.

"All activity indicators confirm the shift in Australia's economic momentum adding weight to the conclusion that the overall economic slowdown appears to be over," Warren Hogan, Chief Economic Advisor at Judo Bank said.

The composite output index that combines manufacturing and services PMIs advanced to 53.0 in April from 48.5 in March. The score indicated the fastest growth in the private sector in a year.

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