Range of services feel pinch

THE Australian services sector is still expanding but at a slower pace, with business conditions variable across sectors and states, research suggests.

Retail and the hospitality trades are finding conditions particularly tough as higher household electricity costs and slow wages growth curb consumer spending, according to polling by the Australian Industry Group.

It found retailers were also feeling the pinch of growing competition from online operators and offshore sellers.

Ai Group yesterday said all businesses were being affected by rising energy costs, which was putting pressure on margins and proving difficult to pass on to customers already reluctant to spend.

Its performance of services index fell 0.9 points to 52.1 in September, but stayed above the 50-point level, signifying an expansion.