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Data shows some growth in retail

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AAP

2012-12-05

The services sector remains weak despite a slight monthly improvement, but there is some good news for retailers.

The Australian Industry Group and Commonwealth Bank Australian performance of services index (PSI) improved in November, rising 4.3 points from October to 47.1.

But the index is still in contractionary territory, with a reading below 50.

The data included an encouraging sign for the retail sector, which rose 13.6 points to 55.2 in November - showing expansion for the first time in 12 months.

Australian Industry Group chief executive Innes Willox said a rise in retail was promising in the lead up to Christmas.

"While the sector as a whole remains weak, there are some tentative signs of encouragement including the lift in retail trade one month out from Christmas," he said in a statement.

Growth was also reported in the health and community services sector, up 12.4 points to 51.6, and in finance and insurance, which was up 3.4 points to 69.7.

Communications services fell 23 points to 22.0 in November, and accommodation, cafes and restaurants fell 7.2 points to 41.0.

There was some growth seen in new orders from businesses, up 5.4 points to 46.3, and the employment index rose 4.2 points to 48.3.

Mr Willox said the overall results showed Australians remain cautious with their spending.

"Continuing weakness in the services sector lends support to yesterday's decision to cut interest rates," he said.

The Reserve Bank of Australia (RBA) cut the cash rate by a quarter of one percentage point to 3.00 per cent on Tuesday - the cash rate's lowest point since the global financial crisis.

Caroline Smith