The Australian Industry Group Australian Performance of Services Index (Australian PSI®) plunged by 8.3 points to 38.7 in March – a fourth month of decline for Australia’s services industries and the lowest result since March 2009 (results below 50 points indicate contraction, with the distance from 50 points indicating the strength of the decrease).
The services sector is now entering a difficult period of pandemic-related closures and adjustments from a base already weakened by summer’s bushfire crisis and by longer-term factors. Local responses to the global COVID-19 pandemic are already decimating large segments of the services sector.
The Australian PSI® indicated stable conditions in finance & insurance but contractions in the five other sectors in March (trend). Restrictions on human movement and gatherings means closures for many businesses in hospitality, retail, transport, recreation, personal services, education and even community services. Businesses that remain open face falling sales and increasing operational restrictions.
Businesses that responded early in the survey collection period for March were generally still optimistic. But as activity restrictions were progressively announced across Australia, respondents became far more pessimistic.
