The service market in Australia is seen to surge this year after experiencing an almost decade high.
The Australian Industry Group’s Performance of Services Index (PSI) jumped from 6.6 points to 57.7 points last December, the highest level the index has reached since May 2007.
Ai Group revealed that there are a number of respondents who said conditions were more positive in December, with increased orders from the mining sector, strong customer demand, lower value of the Australian dollar, stable interest rates, and abundant agricultural harvests.
“Overall, there was a sense of increased confidence from respondents across many services sub-sectors,” Ai Group said.
Innes Willox, Ai Group chief executive, said that the increase was a result of the gradual recovery in activity in October and November.
“Sales and new orders were particularly strong across many services sub-sectors pointing to the likelihood of a strong start to the new year,” he said.
Led by personal and recreational services, six out of nine service subsectors expanded with activity going up to the highest level ever reached since March 2012.
The sectors who grew were the finance and insurance service that experienced a rapid growth, property and business services, and health and community service that grew with slower rates.
Unfortunately, other sectors experienced a decrease such as accommodation, cafes, and restaurants. The Transport and storage and the communications sub-sectors were also part of the trip down.
At the same time, there is a rise in both input and selling prices, but wages are experiencing moderate growth.
Willox explained that the housing investment has shown the vulnerability and fragility of the country’s business environment after transitioning away from mining investment and has steered it towards more broader and more sustainable growth.
“The services sectors provide the bulk of Australia’s economic activity and employment opportunities, so it is crucial to us all that they perform well,” he said.
“Challenges and risks abound in 2017 in Australia and globally, so a solid and supportive policy environment is becoming more urgent than ever.”
With all the changes that have happened in 2016, such as increases in housing property, decreasing growth in some sectors, and customer confidence, business brokers victoria should come up with strategies to keep customers interested.
