Prashant Mehra
(Australian Associated Press)

Australia’s service sector activity has continued to expand in April but the jobs-heavy health and community services industry, along with retail trade, have contracted.

The Australian Industry Group’s Performance of Services Index (PSI) rose 1.3 points to a level of 53.0 points in April, staying above the 50-point level signifying expansion.

It was the seventh consecutive month in which headline services activity either expanded or remained steady.

Ai Group chief executive Innes Willox said a lift in sales, employment and new orders helped improve the pace of growth in the services sector.

“As is the experience across most of the economy, while overall sales levels are healthy, margins remain compressed and profitability has yet to strengthen,” he said.

Five of the nine services sub-sectors expanded in the month, with growth was concentrated in property and business services, wholesale trade and finance & insurance.

Hospitality services, which includes accommodation, cafes and restaurants, was stable, but other sub-sectors – including health & community services, retail trade and communication services – shrank during the month.

Input prices continued to edge higher and wage growth improved for a ninth straight month.