By James Glynn
SYDNEY--The rate of expansion in Australia's services industry activity eased in June in line with a broad slowing in the economy, with input price inflation falling to its lowest level in 33 months.
The seasonally adjusted Judo Bank Australia Services Purchasing Managers Index fell to 51.2 in June, down from 52.5 in May. The latest reading signaled a fifth successive monthly expansion in services activity, though at the slowest pace in the current sequence.
However, while there was some evidence of an easing in price pressures, service providers nevertheless continued to raise selling prices, the data showed.
The output price index for the services sector remained slightly below 55 in June and has made little progress in heading towards pre-pandemic levels since October last year.
"While firms benefited from a fall in input price pressures through June, this easing of cost pressures did not result in fewer services sector firms raising prices relative to the prior month," said Matthew De Pasquale, economist at Judo Bank.
"This suggests that domestic service sector inflation is not easing all that much, consistent with recent CPI outcomes," De Pasquale added.
The prices data comes amid heightened concerns about inflation in Australia with money markets putting big bets on a further interest rate rise in August.
The Reserve Bank of Australia has cited stubborn services sector inflation as a major source of uncertainty for policy makers. It retains a clear tightening bias.
Write to James Glynn at james.glynn@wsj.com
(END) Dow Jones Newswires
07-02-24 1945ET
