Financial News: Australia Services Sector Falls Into Contraction - S&P

Australia Services Sector Falls Into Contraction - S&P Global

(RTTNews) - The services sector in Australia slipped into the red in May, the latest survey from S&P Global revealed on Wednesday with a services PMI score of 48.7.

That's down from 50.7 in April and it falls beneath the boom-or-bust line of 50 that separates expansion from contraction.

Reduced demand, market uncertainty and higher prices due to the war in the Middle East were behind the fall in business activity, according to respondents. Lower activity was recorded in the real estate and business services, transport and storage and finance and insurance sectors. Meanwhile, growth was maintained in consumer services and information and communication.

The survey also showed that the composite PMI dropped to 48.7 from 50.4 in the previous month.

Input costs continued to increase rapidly, while the pace of output price inflation was little-changed from the 44-month high posted in April. Meanwhile, business confidence dropped to a two-and-a-half year low.

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