Australia's service sector contracted for the first time in three months in November on subdued sales growth and demand conditions, survey results from IHS Markit and Commonwealth Bank of Australia showed on Wednesday.
The services Purchasing Managers' Index fell to 49.7 from 50.1 in October. A score below 50 indicates contraction.
New business intakes increased at a marginal pace in November. Drought-related disruptions and global trade war impacts had dampened demand for Australian services. Consequently, jobs growth remained soft and marginal overall.
On the price front, service providers continued to face solid increases in operating expenses, with input price inflation intensifying in November. Services fees dropped for the first time since June 2016.
Business sentiment improved in November, but it remained relatively subdued.
Further, the survey showed that the composite output index dropped to 49.7 in November from 50.0 in October. The latest reading reflected declines in both services business activity and manufacturing output.