AIG Services Index is not the most important out of the three PMI indicators to look for in the Australian economy and the reason for that is that the Australian economy is more influenced by what is happening on the commodity side of things than by what is happening with the services in the country.
It is a survey based on managers in the services industry being asked to respond questions regarding the general level of activity in the company, employment, etc, and based on their answers an index is released and the values are interpreted in relation with the fifty level: higher than fifty shows industry expansion, lower than fifty shows industry contraction.
The most important things to take into consideration when looking at the AIG Services Index in Australia are:
- release date: monthly, on the third business day after the month ends;
- release time: 23:30 GMT, during the Asian trading session;
- actual > forecast = good for currency;
- actual < forecast = negative for currency;
- first tier data;
- brings important volatility levels;
- leading indicator of economic health.