The Australian services sector continued its contraction into January, albeit at a slower rate, as shown by the recent survey results from Judo Bank. This was evidenced by a services PMI score of 49.1, a rebound from the 47.1 recorded in December. However, this figure still languishes below the significant 50-point threshold, which marks the divide between expansion and contraction.
The survey illustrated that new business remained largely consistent at the beginning of the year. Despite reports of reduced demand due to high interest rates and a weakening economy, the growth in new enquiries largely offset these issues. Unfortunately, international demand continued its downward trend due to budget restrictions and supply chain problems, though this decline did soften slightly in January.
Additionally, Australian service providers maintained their commitment to addressing their backlog of work; this marked the nineteenth consecutive month of such effort. This trend aligned with an expanded workforce capacity, as companies continued to recruit new employees to handle persistent workloads.
