SYDNEY, Dec 3 (Reuters) - Activity in Australia's service sector expanded for a second month in November while employment grew for the first time in 17 months, an industry survey showed on Thursday.
The Australian Industry Group (AiG)-Commonwealth Bank performance of services index (PSI) eased 2.3 points in November as sales came off the boil, but at 52.5 still remained above the 50 level that marks the threshold between growth and contraction.
The survey of around 200 companies found employment increased in five of nine industry sectors, with the greatest growth in personal & recreational services and communications. The index of employment rose 1.9 points to 50.5.
'Particularly cheerful is the fact that leading indicators such as new orders, sales and employment have all trended higher into expansionary territory,' said CBA senior economist John Peters.
'Unemployment may be reaching a cyclical peak. The latest PSI employment result bolsters our view that the peak in unemployment is likely to be in the 6 to 6.5 percent range this cycle.'
The jobless rate has hovered around 5.8 percent for some months, surprising policy makers who had feared it would keep rising to peak above 8 percent next year.
The Reserve Bank of Australia (RBA) this week noted unemployment was likely to peak at a considerably lower level than expected, one reason it chose to raise interest rates for a third straight month.
Sales and new orders grew again, though the pace slowed a little after a jump in October. The index of sales dipped 4.3 points to 55.4, while new orders eased 1.8 points to 56.7.
The survey showed firms ran down inventories in November, particularly in retailing, ending October's modest re-stocking. The index of inventories dropped 7.6 points to 44.6.
There was also a pick up in costs, notably in retail, accommodation and cafes and restaurants. The index of input priced climbed 8.7 points to an eight-month high of 66.0.
(Reporting by Wayne Cole; Editing by Jonathan Standing) (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) Keywords: AUSTRALIA ECONOMY/SERVICES (wayne.cole@reuters.com ; +61 2 9373 1813; Reuters Messaging: wayne.cole.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
The Australian Industry Group (AiG)-Commonwealth Bank performance of services index (PSI) eased 2.3 points in November as sales came off the boil, but at 52.5 still remained above the 50 level that marks the threshold between growth and contraction.
The survey of around 200 companies found employment increased in five of nine industry sectors, with the greatest growth in personal & recreational services and communications. The index of employment rose 1.9 points to 50.5.
'Particularly cheerful is the fact that leading indicators such as new orders, sales and employment have all trended higher into expansionary territory,' said CBA senior economist John Peters.
'Unemployment may be reaching a cyclical peak. The latest PSI employment result bolsters our view that the peak in unemployment is likely to be in the 6 to 6.5 percent range this cycle.'
The jobless rate has hovered around 5.8 percent for some months, surprising policy makers who had feared it would keep rising to peak above 8 percent next year.
The Reserve Bank of Australia (RBA) this week noted unemployment was likely to peak at a considerably lower level than expected, one reason it chose to raise interest rates for a third straight month.
Sales and new orders grew again, though the pace slowed a little after a jump in October. The index of sales dipped 4.3 points to 55.4, while new orders eased 1.8 points to 56.7.
The survey showed firms ran down inventories in November, particularly in retailing, ending October's modest re-stocking. The index of inventories dropped 7.6 points to 44.6.
There was also a pick up in costs, notably in retail, accommodation and cafes and restaurants. The index of input priced climbed 8.7 points to an eight-month high of 66.0.
(Reporting by Wayne Cole; Editing by Jonathan Standing) (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) Keywords: AUSTRALIA ECONOMY/SERVICES (wayne.cole@reuters.com ; +61 2 9373 1813; Reuters Messaging: wayne.cole.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.