The Australian services sector is enjoying its longest growth expansion in the month of September since the global financial crisis hits as the falling Australian dollar of the tourism and consumer are being boosted.
Last month (September), the Performance of Service Index by the Australian Industry Group hit 52.3 and that was beyond the critical 50-point level, which separates expansion from contraction.
The index indicates an ease by 3.4 points in the month and that means that the growth slowed in September but still the sector stays in expansion in general. The previous recorded index of four-month stretch of growth was in March 2008 and that was seven years ago.
Innex Willox said that the result was great welcome news. Willox is the chief executive of Australian Industry Group. He further said, “This broadening of the sources of domestic growth is an encouraging sign of an economy responding favorably to the stimulus of low interest rates and further fall in the Australian dollar. Local tourism, retail and other consumer services are noticing the benefits of the lower dollar offsetting the higher currency prices of imported inputs.”
As recorded, the index showed new orders eased 5.1 points in the month to 51.8, services sales slowed by 6.9 points to 58.5 and stock levels rose 5.9 points to 50. However, the employment rate contracted slightly, falling 3.6 points to 48.9 after a couple of months of expansion.
More on the records show that the sub-sectors finance and insurance grew for 9th consecutive month, property and business services expanded for 3rd month, while health and community services and hospitality continued August’s return to growth.
On the other hand, the transport and storage sectors stabilized for the first time since the month of July 2012, but activity in personal and recreational services and communications continued to shrink.
Moreover, Mr. Willox said that the change of leadership has made a possible influence in the growth illustrating the replacement of Prime Minister Tony Abbott by Malcolm Turnbull. Willox said it might make an impact on sentiment.
He said in addition, “Still buoyant housing market activity is clearly a factor in the growth of some sub-sectors and there is early evidence that the changes in the political environment may have supported consumer confidence and sales.”
Indeed, that was a good news for Australia’s economy after seven years of experiencing financial crisis and Mr. Willox hopes that this growth will expand more and more to stabilize the economy.