The Australian Industry Group Australian Performance of Services Index (Australian PSI®) fell slightly by 0.1 points to 31.5 points in June, indicating another serious contraction in activity and at a similar pace to May. This was the second lowest result in the history of this series (commencing in 2003), following a record low in April (results below 50 points indicate contraction, with lower numbers indicating a stronger pace of decline).
The Australian PSI® continued to indicate contraction in all sectors in June (trend). Restrictions on activity have now been in place since March, to varying degrees, around Australia. The recent easing of restrictions in some locations led to optimism for a few businesses as enquiries increased. However, all indicators were firmly negative for June and employment decreased significantly from the previous month.
Reduced customer demand continued to drag down most businesses across all services sectors in June. Some respondents reported the instant asset tax write-off had a positive effect on sales as did end of financial year discounting. Consumer sales have been impacted by uncertainty, tightening income and falling employment. Some business-oriented respondents reported that a lack of work in the pipeline was creating uncertainty about the outlook after current projects had finished.