Judo Bank’s Australian November Services PMI declines from 46.3 to 46.0

• The Australian services sector sees additional declines after markets were hoping for a steady reading.
• Australian Services PMI declined to 46.0 versus the forecast 46.3.

Judo Bank Service Purchasing Managers’ Index (PMI) figures for November missed market expectations at a steady reading of 46.3, in-line with October’s print, declining to an even 46.0 print.

New business activity declined at its fastest rate in over two years in October, and price pressures are continuing to intensify. 

November’s Services PMI print is the second month in a row the figure has declined, but a still-high pace of new hires, with employment growth reaching a twenty-seven-straight month uptrend, is seeing price pressure remain elevated.

As noted by Warren Hogan, Chief Economic Advisor at Judo Bank, “This is the lowest reading for this key indicator of services sector activity, outside of periods of lockdown during the pandemic, in the 8-year history of the survey.”

Warren added, “Business activity in Australian service industries has slowed sharply since September and all but confirms that the economy is experiencing a soft landing, consistent with the RBA’s narrow path.”

Market Reaction 

The Aussie (AUD) remains little-changed in Tuesday’s early market session, with the AUD/USD waffling near 0.6620.

About the Judo Bank Services PMI

The Services Purchasing Managers Index (PMI), released on a monthly basis by Judo Bank and S&P Global, is a leading indicator gauging business activity in Australia’s services sector. The data is derived from surveys of senior executives at private-sector companies from the services sector. Survey responses reflect the change, if any, in the current month compared to the previous month and can anticipate changing trends in official data series such as Gross Domestic Product (GDP), employment and inflation. A reading above 50 indicates that the services economy is generally expanding, a bullish sign for the Australian Dollar (AUD). Meanwhile, a reading below 50 signals that activity among service providers is generally declining, which is seen as bearish for AUD.