7/29/2019 Psi Feb 2013 Final Report

1/2

Supported by:

Key findings The latest seasonally adjusted Australian Industry Group/

Commonwealth Bank o Australia Perormance o Services Index

(Australian PSI) rose 3.1 points in February to 48.5 (readings below

50 indicate a contraction in activity, with the distance rom 50indicating the scale o decline).

This was the highest level o the Australian PSI since June

2012. It was supported by increases in the sales, new orders, and

employment sub-indexes, with employment levels rising or the

rst time since January 2012.

In three-month-moving average terms, the Australian PSI has slowly

trended upwards over the past six months, during a period which

saw the 125 basis point cut to the ocial cash rate during 2012.

This has seen a gradual rise in the activity indexes o sub-sectors

directly exposed to household spending including personal &

recreational services and retail trade.

The activity index o the property & business services sub-sector has

also stabilised in recent months (albeit in contractionary territory),

ater declining through much o 2012.

sectors On a seasonally adjusted basis, two sub-sectors expanded in

February, down rom our in January (i.e. the activity index o

these sub-sectors was above 50 points).

Businesses in the health & community services and personal &

recreational services sub-sectors reported growth in activity levels

or a second consecutive month.

At the other end o the scale, the property & business services

and transport & storage sub-sectors reported urther alls in

activity in February. The property & business services sub-sector

has been contracting (with index readings under 50 points) since

December 2011.

Businesses in these sub-sectors reported that declines in mining

sector sentiment and continuing weakness in manuacturing and

non-residential construction were hampering activity.

sales and capacity On a seasonally adjusted basis, sales levels contracted again

in February.

The sales component o the Australian PSI rose 4.3 points to

47.7 points.

The sales sub-index was weighed down by sharp declines in sales

levels in the transport & storage and retail trade sub-sectors.

On the other hand, modest sales growth was recorded in the

personal & recreational services sub-sector.

Capacity utilisation in the services sector (which is not seasonally

adjusted) increased by 1.1 points to 76.3%, which is in line with

the average level recorded since the start o 2010.

25

30

35

40

45

50

55

60

Diffusion

Index

I

ncreasing

Decreasing

May10

June10

July10

Aug10

Sep10

Oct10

Nov10

Dec10

Jan11

Feb11

Mar11

Apr11

May11

June11

July11

Aug11

Sept11

Oct11

Nov11

Dec11

Jan12

Feb12

Mar12

Apr12

May12

June12

July12

Aug12

Sept12

Oct12

Nov12

Dec12

Jan13

Feb13

3 month moving averageAustralian PSI

Wholesale trade

Retail trade

Accommodation, cafes & restaurants*

Transport & storage

Communication services*

Finance & insurance*

Property & business services

Health & community services

Personal & recreational services

PSI

IncreasingDecreasing

Diffusion Index Jan 13 Feb 13

0 10 20 30 40 50 60 70 80 90 100

25

30

35

40

45

50

55

60

65

May10

June10

July10

Aug10

Sep10

Oct10

Nov10

Dec10

Jan11

Feb11

Mar11

Apr11

May11

June11

July11

Aug11

Sept11

Oct11

Nov11

Dec11

Jan12

Feb12

Mar12

Apr12

May12

June12

July12

Aug12

Sept12

Oct12

Nov12

Dec12

Jan13

Feb13

DiffusionIndex

Capacity Utilisation

Sales

CapacityUtilisation%(

Unadj.)

55

60

65

70

75

80

85

*Activity indexes or the nance & insurance, communicationservices and accommodation, ca & restaurant sub-sectors werenot published this month due to the small number o surveyresponses rom these sub-sectors.

services sector nudges towards growth in february

february 2013

australianp

si

uK

services

indeX

usa

services

indeX

euroZone

servicesindeX

48.5

30

35

40

45

50

55

60

65

48.6

JAN

DEC

JAN

DEC

JAN

30

35

40

45

50

55

60

65

51.5

30

35

40

45

50

55

60

65

30

35

40

45

50

55

60

65

JAN

FEB

55.2

DEC

7/29/2019 Psi Feb 2013 Final Report

2/2

what is theaustralian psi?

The Australian IndustryGroup Commonwealth BankAustralian Performance ofServices Index (Australian PSI)is a seasonally adjusted nationalcomposite index based on thediusion indexes or sales,orders/new business, deliveries,inventories and employmentwith varying weights. AnAustralian PSI reading above50 points indicates services

activity is generally expanding;below 50, that it is declining.The distance rom 50 is indicativeo the strength o theexpansion or decline.

More inormation can beobtained rom the Ai Group

website www.aigroup.com.au

sponsorstatement

Commonwealth Bank isdelighted to be the sponsoro the Australian PSI and ispleased to be able to providethe expertise o our ChieEconomist Michael Blythe as

the key spokesperson or thePerormance o Services Index.The Commonwealth Bank isone o Australia's premierservice organisations and withthe majority o the Australianeconomy being services basedwe believe this important pieceo research will add real valueto the industry. It will provideinsights and inormation thathave not previously beenavailable. We look orwardto continuing to work withthe Australian Industry Groupto enhance and develop theAustralian PSI.

contact

Innes WilloxChie ExecutiveAi Group03 9867 0111

Michael WorkmanSenior EconomistCommonwealth Banko AustraliaMobile: 0414 870 394

Markit Economics

www.markiteconomics.com

The Australian Industry Group, 2013

This publication is copyright.Apart rom any air dealing or the

purposes o private study or research

permitted under applicable copyright

legislation, no part may be repro-

duced by any process or means with-

out the prior written permission o The

Australian Industry Group.Disclaimer The Australian IndustryGroup provides inormation servicesto its members and others, whichinclude economic and industry policyand orecasting services. None othe inormation provided here isrepresented or implied to be legal,accounting, nancial or investmentadvice and does not constitutenancial product advice. TheAustralian Industry Group does notinvite and does not expect any personto act or rely on any statement,opinion, representation or interer-

ence expressed or implied in thispublication. All readers must maketheir own enquiries and obtain theirown proessional advice in relation toany issue or matter reerred to hereinbeore making any nancial or otherdecision. The Australian IndustryGroup accepts no responsibility orany act or omission by any personrelying in whole or in part upon thecontents o this publication.

AIG12697

new orders On a seasonally adjusted basis, new orders ell again in February, but

the rate o decline eased markedly.

The new orders sub-index rose by 5.7 points to 48.7 points.

The all in the new orders across the services sector was driven by

especially weak activity in the transport & storage and retail trade

sub-sectors.

Falling new orders in these sub-sectors were partly oset by growth

in the health & community and personal & recreational services

sub-sectors.

Businesses noted that alling new order levels stemmed rom

weakness in large parts o the manuacturing and construction sectors,

as well as some moderation in mining sector activity.

Supported by:

employment and wages On a seasonally adjusted basis, employment expanded in the services

sector in February, or the rst time since January 2012.

The employment sub-index rose 1.8 points in February to 51.7. This

was the highest reading or the employment sub-index since

August 2011.

The rise in employment levels was strongest in the retail trade and

health & community services sub-sectors.

This was oset however by employment reductions in the personal

& recreational services and wholesale trade sub-sectors.

On a non-seasonally adjusted basis, the average wages index rose by

1.6 points to 59.8 in February to be above the average level recorded

since the start o 2010.

The average wages index was supported by solid wage growth in thetransport & storage and health & community services sub-sectors.

stocKs and deliveries On a seasonally adjusted basis, stock levels (or inventories) in the

services sector declined or a ourth consecutive month in February,

and at an accelerating rate o contraction.

The stocks sub-index o the Australian PSI ell by 4.4 points in the

month to 45.0 points.

The all in the index was driven by declining stock levels in the

transport & storage and retail trade sub-sectors.

The supplier deliveries sub-index increased by 4.1 points this month

to 46.1 points, but remained below the 50 point level separating

expansion rom contraction.

The decline in deliveries to the services sector was driven by activity

in the transport & storage and personal & recreational servicessub-sectors.

nput costs and selling prices On a non-seasonally adjusted basis, the input prices index rose 2.8

points to 62.8 in February, which is broadly in line with the average

level recorded since the start o 2009.

On a non-seasonally adjusted basis, the average selling prices index

decreased by 4.9 points to 44.3, remaining well below the critical 50

point level separating expansion rom contraction.

The average selling price index or the retail trade sector was below

the critical 50 point level separating expansion rom contraction or

the 15th consecutive month in February, as businesses continue to

lower prices to help stimulate sales volumes.

The low level o the average selling prices index is consistent with

recent weakness in Australian infation more generally, with headlineinfation recording just 2.2% p.a. in the December quarter o 2012

(and with even smaller price changes or many oods and other

consumer goods).

australian psi* february 2013

February 2013 January 2013 Monthly Change Direction Rate o Change Trend** (Months)

australian psi 48.5 45.4 3.1 Contracting Slower 12

sales 47.7 43.4 4.3 Contracting Slower 7

new orders 48.7 43.0 5.7 Contracting Faster 7

employment 51.7 49.9 1.8 Contracting Slower 12

supplier deliveries 46.1 42.0 4.1 Contracting Slower 7

nventories 45.0 49.4 -4.4 Contracting Slower 3

nput prices 62.8 60.0 2.8 Expanding Faster 119

selling prices44.3 49.2 -4.9 Contracting Slower 15

wages 59.8 58.2 1.6 Expanding Slower 42

apacity utilisation (%) 76.3 75.2 1.1 Slower 12

esults are based on the responses o around 150 companies. Forward seasonal actors were generated by the ABS in April 2012.

Australian PSI data is seasonally adjusted or sales, new orders, employment, supplier deliveries, inventories and input prices.

* Number o months moving in current direction.

you would like to participate in this survey, please send your details to economics@aigroup.asn.au

20

25

30

35

40

45

50

55

60

65

Diffusion

Index

Increasing

Decreasing

M

ay10

June10

Ju

ly10

Aug10

Sep10

O

ct10

Nov10

D

ec10

Jan11

Feb11

M

ar11

A

pr11

M

ay11

June11

Ju

ly11

Aug11

Se

pt11

O

ct11

Nov11

D

ec11

Jan12

Feb12

M

ar12

A

pr12

M

ay12

June12

Ju

ly12

Aug12

Se

pt12

O

ct12

Nov12

D

ec12

Jan13

Feb13

30

35

40

45

50

55

60

65

70

Diffusion

Index

Increasing

Decreasing

Average wages

Employment

May10

June10

July10

Aug10

Sep10

Oc

t10

Nov10

Dec10

Ja

n11

Feb11

Ma

r11

Ap

r11

May11

June11

July11

Aug11

Sep

t11

Oc

t11

Nov11

Dec11

Jan12

Feb12

Ma

r12

Ap

r12

May12

June12

July12

Aug12

Sep

t12

Oc

t12

Nov12

Dec12

Jan13

Feb13

25

30

35

40

45

50

55

60

StocksDeliveries

Diffusion

Index

Increasing

Decreasing

May1

0

June1

0

July1

0

Aug1

0

Sep1

0

Oct1

0

Nov1

0

Dec1

0

Jan1

1

Feb1

1

Mar1

1

Apr1

1

May1

1

June1

1

July1

1

Aug1

1

Sept1

1

Oct1

1

Nov1

1

Dec1

1

Jan1

2

Feb1

2

Mar1

2

Apr1

2

May1

2

June1

2

July1

2

Aug1

2

Sept1

2

Oct1

2

Nov1

2

Dec1

2

Jan1

3

Feb1

3

Input Prices

Selling Prices

Diffusion

Index

Increasing

Decreasing

25

30

35

40

45

50

55

60

65

70

75

80

May10

June10

July10

Aug10

Sep10

Oct10

Nov10

Dec10

Jan11

Feb11

Mar11

Apr11

May11

June11

July11

Aug11

Sept11

Oct11

Nov11

Dec11

Jan12

Feb12

Mar12

Apr12

May12

June12

July12

Aug12

Sept12

Oct12

Nov12

Dec12

Jan13

Feb13