Service sector growth slows in March | The Lawyer – Hepburn
Growth in Australia’s service sector has slowed due to price pressures and staff shortages.
The Australian Industry Group’s services performance index fell 3.8 points to 56.2 in March, although it still held above the 50-point mark, which separates expansion of contraction.
“Australia’s services sector continued its positive run in March, although the pace of growth slowed in the face of mounting input price pressures, difficulties in finding staff and new wage pressures,” it said. said Ai Group chief executive Innes Willox.
“The sharp increase in new orders reported in March will see the capacity of many businesses stretched over the coming months, while the availability of staff and the supply of inputs are expected to remain constrained.”
Separate new figures could indicate whether the labor market has tightened further and whether the unemployment rate is on the verge of falling below 4% for the first time in almost 50 years.
The Australian Bureau of Statistics will release its payroll employment report for the fortnight to March 12 on Thursday, with a guide to the full March labor force report due out next week.
The unemployment rate fell to 4%, its lowest level in 14 years, in February.
Both the Reserve Bank of Australia and the Treasury expect the unemployment rate to fall to 3.75% later this year, a level not seen since 1974.
But some economists predict that a rate below four percent could occur as early as March.
A faster drop in unemployment will add to speculation that the RBA could raise the cash rate as early as June.
The ABS will also release international trade figures for February on Thursday.
The consensus among economists points to a surplus of $12.1 billion, down slightly from the $12.9 billion surplus recorded in January.
However, Westpac economists forecast a surplus of $13.2 billion, a hair below the record high of $13.3 billion set last July.
They expect exports to be boosted by higher global prices and volumes for coal and LNG, extending the 7.6% rise in exports seen in January, which was led by iron ore. .
The Department of Industry, Science, Energy and Resources’ March Quarter Resources and Energy Report released earlier this week forecast export earnings to hit a record $425 billion. dollars for the 2021/22 financial year.
The report notes that Australia’s combined coal export earnings are expected to reach around $110 billion in 2021/22, with international coal prices at record highs amid war in Ukraine and La Nina weather. affect supply and demand.
“Coal becomes only the second Australian product after iron ore to cross the $100 billion annual export mark,” said Resources Minister Keith Pitt.
Australian Associated Press