Activity in the services sector has fallen for the seventh consecutive month, but there are signs that it might be getting ready for a recovery.
The Australian Industry Group's Australian Performance of Services Index (PSI) was down four points to 45.4 in September.
A reading below 50 indicates the sector is contracting. The lower the number the faster the contraction.
Ai Group chief executive Innes Willox said the sharp fall in the sales index underlines the fragility of an economy that is in search of sources of growth beyond mining and resources.
"With commodity prices falling and global markets displaying greater volatility, it has become more important that we develop new areas of strength in the domestic economy," he said.
However, Mr Willox said there were some encouraging signs for the sector.
"The retail sub-index entered into positive territory for the first time in over three years, other household-facing sub-sectors such as hospitality and personal and recreational services also expanded," he said.
"The employment sub-index recovered some of the ground lost after six months of contraction."
Five of the nine sub sectors had a mild increase in activity in the month, mostly confined to consumer orientated sectors, such as retail trade, accommodation, cafes and restaurants, as well as personal and recreational services.
Share
