The services sector in Australia fell into contraction territory in March, the latest survey from Judo Bank showed on Wednesday with a services PMI score of 48.6.
That's down from 50.7 in February, and it moves beneath the boom-or-bust line of 50 that separates expansion from contraction.
Softer demand, affected by higher inflation and interest rates, led to fall in new business during March. Although mild overall, the rate of deterioration was nevertheless the fastest since last November. Foreign demand was a little more resilient, however, expanding for a third consecutive month.
The survey also showed that its composite index slipped from 50.6 in February to 48.5 in March.
A faster decline in new orders, observed across both the manufacturing and service sectors, underpinned the latest fall in private sector output. A weaker economic backdrop, characterized by higher inflation and interest rates, led to the latest decline in sales according to panelists. Overall price pressures also eased with both input costs and output prices rising at lower rates in March.
