FX.co ★ Australian Services Sector Growth Softens in December

In December, the S&P Global Australia Services PMI Business Activity Index registered a reading of 51.1, a decrease from November's 52.8. This suggests a deceleration in the growth of the service sector, contingent upon final data confirmation. The slowdown is attributed to diminished service and new business expansion faced with elevated competition, as new orders experienced a slowdown. Despite this, employment saw a more rapid increase as companies actively recruited to handle workloads. Demand for exported services showed signs of weakening, resulting in a more modest increase in new export business compared to November. On a positive note, business confidence climbed to its highest level since June. Regarding costs, input price inflation accelerated, driven by heightened energy, wage, and material expenses, while selling price inflation also increased, reaching a three-month peak.