Retail slump continued in August: PSI
Australian retail activity contracted in August for the ninth month in a row, according to an industry survey, as a continued slide in sales suggested tax and interest rate cuts had not provided "any stimulatory effects" for businesses.
While the Ai Group's Performance of Services Index gained 7.5 points to 51.4, rising back above the 50-point mark separating expansion and contraction in activity, the slide in the retail sector accelerated.
"For most (retailers), the effects of expected stimulus following the reduction to the cash rate and the increase to the tax offset were not evident in sales across August," the Ai Group said on Wednesday.
The PSI, a survey of the Australian services industry compiled from responses of about 200 companies, noted selling prices as well as sales declined during the month for businesses across all sectors.
"Respondents to the Australian PSI continue to attribute this fall in sales to slow demand from retail and some parts of the construction sector," it said, adding "there is no evidence (tax and interest rate cuts) provided any stimulatory effects for businesses".
The leading indicator of services activity detailed a fall in sales and new orders for the retail sector while employment levels were unchanged.
"There was low demand from the retail sector due to a general cautiousness from customers," the report said.
The overall index was propped up by a strong performance in the health, education and community services sector in August which recorded gains in sales, new orders and employment levels.
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