The S&P Global Flash Australia Services PMI Business Activity Index declined to 52.2 in February from 56.3 in January, indicating that the sector continued to expand but at a slower pace. The loss of momentum reflected weaker services activity and a moderation in new business growth as customer demand softened.
Despite this, employment continued to rise and in fact accelerated to its fastest rate in nearly three years, while backlogs of work were broadly unchanged after increasing in January. Export demand edged higher only marginally and made a smaller contribution to overall new business flows.
Business confidence fell to its lowest level in just over 18 months, weighed down by concerns over the economic outlook and stronger competition. On the cost front, both input and output price inflation picked up compared with January, as service providers adopted a more aggressive approach to pricing.
