Australia's Service Sector Expands in June, But Boost May Be Temporary as New Orders Continue to Slide

Australia's service sector returned to growth in June following a contraction in the previous month, as higher staffing capacity allowed for an expansion of business activity despite continued weakness in new orders. The seasonally adjusted S&P Global Australia Services PMI Business Activity Index improved to 50.5 in June from 48.7 in May, advancing beyond the 50 mark that separates growth from contraction, the index provider said Friday. However, S&P Global Market Intelligence Economics Director Andrew Harker cautioned that the rise in activity was driven at least partly by employment growth as opposed to fresh business, as new orders declined for the fourth consecutive month in June. "This may therefore prove to be a temporary boost unless order volumes start to expand again soon," Harker said, adding that Australia will need to see an improvement in the demand environment to sustain the nascent rise in business activity into the remainder of the year. The PMI reading comes as business confidence hit its lowest level since November 2023 after dropping for the second straight month in June. Concerns about the overall economy and tax changes outlined in Australia's federal.