SYDNEY, April 3 A private survey of Australia's
service sector showed a sharp pullback in March after an
outsized gain the previous month, with firms citing concerns
about potential spending cuts in the government's May budget.
The Australian Industry Group's performance of services
index (PSI) fell 6.2 points to 48.9 in March, so undoing all of
February's jump. Measures of sales, employment and inventories
all dropped back below 50, though new orders held up better at
"Concerns over the domestic economy and uncertainties
surrounding potential spending cuts in the Federal and state
budgets have reportedly dampened demand for services," said AIG.
The Liberal National government has been warning that a
tough budget will be needed to reign in spending and make up for
a shortfall in revenue.
Official measures of services activity have been
consistently stronger than the PSI, which has been in recession
territory for much of the past five years even as the economy
managed annual average growth of 2.5 percent.
(Reporting by Wayne Cole)