Activity in the key services sector of Australia's economy fell
to a 15 month low in October. The trend is concerning economic commentators and
points to a difficult period for retailers this Christmas. The Performance of Services
Index compiled by the Australian Industry Group fell 1.8 points to 43.6 during
October.
Services account for more than three quarters of employment in
the country and includes key areas like insurance and finance which have shown
sharp declines in activity. Slow growth in disposable income along with a flat
labour market is likely to see hesitant spending this Christmas period as
employees become more concerned about their future.
Commentators look to the services sector for the first signs of economic
growth and that is unlikely to occur in the short term. QVM Traders will need
to look for every advantage as we battle for limited disposable income in the
lead up to Christmas.