Indicator Digest - CMS Forex

Services PMI

Services are measured by the Purchasing Managers Index (PMI) in the US, Euro-zone, UK and Australia. A level above 50 indicates expansion in the services sector, while a reading below 50 indicators contraction. The Index measures employment, production, new orders, supplier deliveries, and inventories. It is also one of the timeliest indicators, coming out near the beginning of the month.

Main Indicator: Services PMI

Most Recent Release

September
2nd, 2008

Actual

Forecast

Revised Form

39.3

42.8

N/A

For August (s.a.)
Provided by: Australian Industry Group (AIG)
Official Release: PDF

From the Release: "■ The seasonally adjusted Australian Industry Group/Commonwealth Bank Performance of Services (Australian PSI®) fell 3.5 points to 39.3, remaining well below the key 50.0 level separating expansion from contraction.
■ Services sector activity deteriorated further in August, amid soft consumer and business confidence and weaker economic conditions.
■ The fifth consecutive monthly decline in services activity was underpinned by significant falls in sales and new orders. Employment in services continued to decrease, although at a slower pace, while supplier deliveries tumbled further.
■ None of the nine services sectors reported activity growth in August, with the more discretionary services sectors of retail trade and accommodation, cafes & restaurants amongst the hardest hit.
■ High fuel prices also impacted significantly on the transport & storage sector."

Table of Past Data

	11/4	12/4	1/3	3/4	4/2	5/4	6/3	7/2	8/4	9/2

Actual	53.2	56.4	56.9	53.2	53.8	47.3	49.7	45.4	42.8	39.3
Forecast
Previous	56.4	53.2	56.4	54.9	53.2	54.9	47.3	49.7	45.4	42.8
Revised From	N/A	N/A	N/A	N/A	N/A	53.8	N/A	N/A	N/A	N/A

Past Releases

August
4th, 2008

Actual

Forecast

Revised Form

42.8

45.4

N/A

For July (s.a.)
Provided by: Australian Industry Group (AIG)
Official Release: PDF

From the Releaes:

■ "Services sector activity slumped further in July, with declining levels of consumer and business confidence further restraining household spending and business activity.
■ Firms continue to identify high interest rates and fuel prices as the key factors holding back demand for services.
■ The seasonally adjusted Australian Industry Group/Commonwealth Bank Performance of Services Index (Australian PSI®) fell 2.6 points to 42.8, below the key 50.0 level separating expansion from contraction.
■ New orders and supplier deliveries contracted for a fourth consecutive month, while sales and employment deteriorated at a faster pace.
■ The weakness in activity was broadly-based, although there were signs of resilience in the personal & recreational services and communications services sectors.
■ Activity fell in all states, with the rate of contraction slowing in only Tasmania and Queensland."

July
2nd, 2008

Actual

Forecast

Revised Form

45.4

49.7

N/A

For June (s.a.)
Provided by: Australian Industry Group (AIG)
May's Release: PDF

June
3rd, 2008

Actual

Forecast

Revised Form

49.7

47.3

N/A

May (s.a.)
Provided by: Australian Industry Group (AIG)
Official Release: PDF

The services sector continued to show contraction in May, though the 49.7 was closer to the 50 boom-bust level.

From the Release:

"■ The combination of rising fuel costs, high interest rates and declining new orders further restrained services activity in May, offsetting modest increases in sales and employment.
■ The seasonally adjusted Australian Industry Group/ Commonwealth Bank Performance of Services Index (Australian PSI®) rose 2.4 points to 49.7, marginally below the key 50.0 level separating expansion from contraction.
■ Only four sectors reported growth in activity in May, although the rate of decline eased in retail trade and transport & storage.
■ The soft conditions were underpinned by a second consecutive monthly fall in new orders and deliveries. Input cost increases grew at their fastest rate since the survey’s inception, contributing to the tough conditions faced by services sector firms.
■ Firms also pointed to weak consumer sentiment; a strong AUD; and skill shortages as factors holding back services activity."

May
4th, 2008

Actual

Forecast

Revised Form

47.3

54.9

53.8

Seasonally Adjusted For April
Provided by: Australian Industry Group (AIG)
Official Release: PDF

The services sector in Australia saw a rather sharp decline for April, falling 7.6 points into contraction territory. Sales and New Orders were down considerably, while employment and wages eased. Input prices, a measure of inflation, rose from 70.5 to 73.5. The Aussie rose vs the US Dollar overnight as traders focused more on inflation data that came out contemporaneously which showed inflation growing above expectations.

Highlights from the Release:

"■ Growth in services sector activity stalled in April; with rising interest rates and high fuel costs further restraining consumer and business demand.
■ While four of the nine services sectors reported growth in April, activity fell sharply in retail trade; finance & insurance; and transport & storage, leading to a decline in overall services activity.
■ The seasonally adjusted Australian Industry Group/ Commonwealth Bank Performance of Services Index (Australian PSI®) fell 7.6 points to 47.3, below the key 50.0 level separating expansion from contraction.
■ The deterioration in activity was underpinned by a decline in sales, new orders, and supplier deliveries. Employment lifted marginally in April, while the rate of stock accumulation rose."

April
2nd, 2008

Actual

Forecast

Revised Form

53.8

53.2

N/A

Seasonally Adjusted For March
Provided by: Australian Industry Group (AIG)
Official Release: PDF

From the Release:

"The seasonally adjusted Australian Industry Group/Commonwealth Bank Performance of Services Index (Australian PSI®) rose 0.6 points to 53.8, above the key 50.0 level separating expansion from contraction but 3.1 points below the recent peak of December 2007.

Growth in services sector activity steadied in March following two consecutive months of easing.

Sales and new orders growth strengthened in March, following weaker increases in the previous month. By contrast, growth in employment and supplier deliveries slowed, as did the rate of stock accumulation.

Growth in selling prices and input costs both eased in the month, while wage increases edged-up slightly."

AUD/JPY Fall After Recent Rally: The Aussie gained overnight initially vs the Yen, but during European trading began to be sold off. These losses accelerated following US jobless claims data. The market may be squaring its positions prior to tomorrow's important US non-farm payroll data.
AUD/JPY

March
4th, 2008

Actual

Forecast

Revised Form

53.2

54.9

N/A

Seasonally Adjusted For February
Australian Industry Group Performance of Service Index

January
3rd, 2008

Actual

Forecast

Revised Form

56.9

56.4

N/A

For December.

December
4th, 2007

Actual

Forecast

Revised Form

56.4

53.2

N/A

Seasonally Adjusted For November
Australian Industry Group Performance of Service Index

"Growth in services activity picked up in November, boosted by a lift in spending and renewed inventory building, partly reflecting a build up in stocks in the lead up to Christmas." New Orders and Employment were steady.

November
4th, 2007

Actual

Forecast

Revised Form

53.2

56.4

N/A

For October.