Australian Services Sector Extends Growth Streak Amid Inflation Worries

Australia's services sector has maintained its growth streak for the third consecutive month in August. The S&P Global services purchasing managers' index (PMI) stood at 53.2, signaling expansion and indicating that demand remains steady.

The PMI reading slipped slightly from July but still reflects a resilient economy. New orders and broad-based gains across most categories have contributed to the growth. However, overseas demand has taken a hit due to high fuel costs and reduced tourism.

The main concern for policymakers is inflation pressure. Input prices continue to rise sharply, prompting companies to increase their prices. This trend could be a warning sign of 'sticky inflation', which may keep expectations for the Reserve Bank of Australia's cash rate higher for longer.