AIG Australia Services Index

The Australian Industry Group (AIG) Services Index is calculated based on the monthly survey of Australian service sector companies. It reflects the current economic development of the national service sector. The indicator calculation includes data from all nine service sectors. These include retail and wholesale, hotel and restaurant services, social services (education, health care, public services), recreational sector, financial and insurance services, real estate and business services, IT and transportation.

This is a diffuse index, which is calculated as a weighted set of key indicators. These include subindexes related to the service activity (sales, new orders, employment, inventories, deliveries from suppliers) and price related subindexes (input and selling prices, as well as average employee wages).

Participants estimate relative changes, i.e. whether the value has increased, decreased or has not changed during the specified month. Each of the values used for the index calculation is given a certain weight.

Readings above 50 indicate the expansion of the construction activity, those below 50 are an indication of a decline. The distance from 50 characterizes the speed and strength of changes in the industry.

Since the service sector makes a significant contribution to the country's GDP and its activity characterizes the economy development, analysts closely follow this index. It is considered to be a strong indicator of the economy state. The index growth can have a positive effect on the Australian dollar quotes.