Economic activity in the services sector has hit its highest point in seven months, but the sector still remains in contraction, according to the latest Australian Industry Group survey.
The Australian Performance of Services Index rose 0.8 points to 47.9 in October. The 50-point mark indicates when a sector is in contraction.
Across the sub-sectors, health and community services rose to 56.1 and finance and insurance reached 50.7 on the index, but consumer-oriented sub-sectors continued to reflect poor consumer demand.
The worst performing sector is currently accommodation, cafes and restaurants with a score of 40 on the index.
Ai Group chief executive Innes Willox said in a statement the sector is “clawing back” toward growth.
“However, conditions remain fragile with slippage in both sales and new orders recorded after a promising recovery in September illustrating that weak consumer demand is holding back growth,” he said.
Business earnings outlook reaches 10-year high
Company profit expectations have hit their highest level since 2003, with 36% of companies anticipating an increase in earnings in the first quarter of 2014, according to the latest Dun & Bradstreet survey.
The profits index has now reached a 10-year high of 34.9 points, up significantly from the 21.1 points in the previous quarter and 22.9 this time last year.
The survey found 16% of businesses also expected increased trading activity and 18% planned to raise the prices of goods and services.
Shares up on open
Aussie shares have opened up this morning, with stocks surging on a strong lead from Wall Street.
The S&P/ASX 200 benchmark was up 40.4 points in morning trade to 5430.9 just at 12:11pm AEDT. The Dow Jones closed overnight up 23.57 points to 15,639.12.