Economic Buzz: Australia services PMI ebbs in May

The services sector in Australia continued to expand in May, albeit it at a slower pace, the latest survey from S&P Global revealed on Wednesday with a services PMI score of 50.6.

That's down from 51.0 in April, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

The easing of services activity growth was in line with the trend for new business. Incoming new orders increased at the slowest rate in the ten-month sequence of expansion. This was attributed to subdued global trade conditions and temporary factors, such as the federal election. Export business meanwhile fell for a third straight month with panelists mentioning reduced orders from clients in the US, UK and Southeast Asian economies.

Concerns over the outlook for growth contributed to a lowering of confidence levels among Australian service providers in May. Businesses were the least optimistic since last November, though expectations for business expansion plans to drive higher activity in the next 12 months were broadly maintained.

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