Australia Services Sector Contracts for First Time Since May
Australia's services sector contracted in October as rising overhead costs and interest rate hikes drove activity to a seven-month low.
The S&P Global Australia Services PMI Business Activity Index fell to 48.5 in October, marking the first contraction for the services sector since May. This decline from September's 51.9 represents the lowest activity level in seven months and the sharpest drop since March.
Rising overhead costs and interest rate increases implemented by the Reserve Bank of Australia drove the downturn. While the sector saw renewed job creation to address existing work backlogs, new business growth slowed and operational constraints hindered performance.
The contraction in services mirrored a similar decline in the manufacturing sector, contributing to a drop in the Composite Output Index to 48.2.
