By James Glynn
SYDNEY–Australian services activity contracted at a slower rate in January, showing the ongoing resilience of the economy despite a record rise in interest rates over the past two years, according to Judo Bank.
The seasonally adjusted Judo Bank Australia Services PMI Business Activity Index rose to 49.1 in January, from 47.1 in December.
“The Australian economy has started 2024 on a positive note,” said Matthew De Pasquale, economist at Judo Bank. “With a recovery in key activity measures, a gradual decline in price indexes, and ongoing employment growth, the economy continues demonstrating resilience to the sharp rise in interest rates.”
The Reserve Bank of Australia will hold its policy meeting this week amid widespread bets that it will signal the end of interest-rate increases. Still, looser monetary policy looks a way off.
Resilience in labor demand continues to play an essential role in moderating the slowdown by the Australian economy, with the employment index for January remaining above the neutral level, close to where it has resided over the past three months, he added.
Incoming new business for the services industry was broadly unchanged in January as increased new enquiries mostly offset instances where lower demand was reported due to high interest rates and softening economic conditions, the data showed.
Write to James Glynn at [email protected]
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