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Category: Economic Trends / Hospitality / Retail

Service index flat, business needs budget boost: Ai Group

Tuesday, 5 Apr 2016 09:12:03 | Thuy Ong

Hospitality received a March boost from the early timing of Easter. (ABC News Sam Ikin)

A new report has shown that Australia's services sector remained broadly flat in March, as hospitality and health expanded but transport and business services contracted.

The Australian Industry Group's Performance of Services Index slipped 2.3 points to 49.5, just short of the 50-mark which indicates expansion.

"March saw the diverse services sector hold onto the small gains recorded in February with an overall flat performance during the month," said the AiGroup's chief executive Innes Willox.

"The ingredient missing from a more robust performance remains the continuing business restraint, particularly in relation to investment."

Mr Willox added that the Federal Government's May budget "clearly has scope for measures to be taken to stimulate business investment and confidence".

Six of nine services sub-sectors were stable or expanded in March, with growing sectors including finance and insurance, health and community services, and personal and recreational services.

The hospitality, health services and recreational services all received a bump up, benefitting from the earlier timing of the Easter holidays.

However, retail trade remained in contraction for a sixth consecutive month as shop owners face tough conditions.

The report flagged that a lower Australian dollar is pushing prices up for imported products and raising costs.

The cooling down of the mining boom means Australia is rapidly shifting away from a resource-backed economy towards other sectors, including services and technology.

Australia weathered the global financial crisis relatively unscathed and is in its 25th year of uninterrupted growth.

AustraliaPlus


 

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