Australia’s Judo Bank Services Purchasing Managers Index (PMI) slipped back in April, printing at 53.6 compared to the previous month’s 54.4. New Services business increased at its fastest pace since May 2022 on the back of higher demand. The overall index performance took a hit as business charges eased at an increasing pace despite a faster rate of input cost increases.
According to Matthew De Pasquale, Economist at Judo Bank: “The Australian Composite PMI for April confirms earlier ‘Flash’ PMI findings of an ongoing rebound in activity levels, continued employment growth, and improved business confidence.”
De Pasquale continued, “The services sector is driving the improvement in economic activity levels. Both the business activity and new order indexes have consistently remained in expansion territory over the past three months. The New Business Index posted the highest reading since May 2022. While these figures suggest an improvement in consumption levels through 2024, official retail sales figures are yet to show clear signs of improvement, remaining tepid.”
The Services Purchasing Managers Index (PMI), released on a monthly basis by Judo Bank and S&P Global, is a leading indicator gauging business activity in Australia’s services sector. The data is derived from surveys of senior executives at private-sector companies from the services sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), employment and inflation. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the Australian Dollar (AUD). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for AUD.
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