Australia Services Activity Expands in June as Staffing Rises, But New Orders Continue to Fall

Australia's seasonally adjusted S&P Global Services purchasing managers' index (PMI) business activity index rose to 50.5 in June from 48.7 in May, signalling a marginal increase in business activity following a contraction in the previous month, according to a Friday report by S&P Global. The report said an increase in staffing capacity helped Australian service providers expand business activity during June, with growth recorded despite a further reduction in new orders, with the overall expansion centred on consumer services firms. Incoming workloads continued to fall for the fourth consecutive month, with panellists reporting a lack of confidence among customers. At the same time, the war in the Middle East was cited as the key factor behind a second successive monthly reduction in new export orders, the report added. Service providers faced a further sharp monthly increase in input costs during June, albeit with the pace of inflation easing for the second consecutive month, with higher fuel prices and wage costs widely cited by panellists, the report added. With new orders falling, companies used extra staffing resources to work through outstanding business, reducing.