A welcome lift in new orders and sales took the services sector into positive territory in August, according to the latest industry data.
The seasonally adjusted Australian Industry Group/Commonwealth Bank Australian Performance of Services Index (Australian PSI) rose 3.3 points to 52.1 in the month (readings above 50 indicate an expansion in activity).
Strong growth in the finance and insurance and communication services sub-sectors drove the August result.
While personal and recreational services was also in the black in August, other sub-sectors related to household spending remained soft.
"The lift in overall services sector activity comes after a protracted period of sluggish performance, said Australian Industry Group Chief Executive, Heather Ridout. “The positive overall result reflects strong expansions in the personal and recreational, finance and insurance and communications services sub-sectors. However, the overall improvement masks declines in performance across the remaining six service sub-sectors.
"The ongoing patchiness across the sector reflects a lack of confidence on the part of households and businesses. Further, it underlines the fragility of the sector in the face of the strong Australian dollar, heightened uncertainties and our high interest rates."