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Australian retail sector activity reportedly increased in September according to a survey of the services industry suggesting it may not be all doom and gloom.

As reported by the Financial Review, the retail sector is recovering following nine months of continuous contraction, with Ai Group chief executive Innes Willox indicating that retail trade remained broadly stable after the declining for the best part of the year.

According to the report, the AIG Australian Performance of Services Index inched up to 51.5 in September 2019 from 51.4 in the previous month.

Despite the increase, sales numbers and selling prices continued to fall during September.

“The low levels of demand from the retail sector due to a general cautiousness from customers persist as some retailers run their inventory levels down,” said Mr Willox.

This has been reflected in recent research released by APAC revealing that high shipping costs are deterring customers away from online shopping, reported earlier today by ChannelNews.

A continued deterioration in conditions for business to business outlined in the report revealed dwindling demand from US companies.

The most dynamic sectors were health and education, rising 0.1 points to 62.8 PSI with finance and insurance rising to 57.8 PSI.

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