Services sector continues to weaken Activity in the services sector is at its lowest level since the global financial crisis despite lower interest rates and a falling Australian dollar. The Australian Industry Group Australian Performance of Services Index (PSI) fell 0.4 points to 39.0 in August. A reading below 50 indicates the sector is contracting. The lower the number the faster the contraction. Ai Group chief executive Innes Willox said many key services industries were still under stress. "Cautious consumers are keeping their hands in their pockets and are reluctant to take on debt," he said. This is keeping a lid on discretionary spending on retail goods, entertainment services and hospitality, which has consequences in turn for wholesale traders and freight transport. Mr Willox said the business orientated services sectors such as finance, communications and transport were still subdued because of weak activity in the manufacturing and construction sectors. "Despite a slight improvement in new orders in August, the reading of under 40 points suggests a meaningful recovery in activity is still some way off," he said.