But retail trade and wholesale trade continued to contract, pointing to further weakness in household spending, Mr Willox said. "Feedback from participants in both the retail and wholesale trade sub-sectors suggests that discretionary spending remains weak in June with proposed federal budget changes to welfare, family payments and public sector employment continuing to weigh on consumer confidence," the survey said. "Unseasonably warm weather in autumn has also depressed sales of winter clothing and appliances in many parts of the country.
It appears likely to be at least several months before momentum would rebuild in the sector, Ai Group chief executive Innes Willox said. "Conditions in the services sector slipped again in June with respondents to the latest Australian PSI survey suggesting that ongoing weakness across much of the domestic economy and the public reception of the federal budget are dampening consumer and business confidence," Mr Willox said.
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