SYDNEY (Reuters) - Australia's service sector enjoyed a sharp upturn in activity in March with strength in new orders and employment even encouraging a long-awaited tick up in wages growth, two surveys showed on Thursday.
The Commonwealth Bank of Australia-HIS Markit measure of services firmed to 55.6 in March, up from 54.2 in February and the highest in eight months. A reading over 50 marks is an expansion in activity.
Likewise, the Australian Industry Group Australian Performance of Services Index climbed 2.9 points to 56.9 in March, the 13th month of expansion and the fastest pace since late 2016.
"Australia's pivotal services sector remained in great shape in the first quarter of 2018, continuing the momentum seen at the end of 2017," said CBA's chief economist Michael Blythe.
Both surveys reported a rise in employment, with CBA's measure of job creation at a six-month peak.
"Strong activity is flowing through to labour demand," added Blythe. "Panellists are also indicating that strong labour demand is boosting salaries, and that other input costs are also rising."
Wage growth has been at or near record low for more than a year, so any hint of a pick up would be positive for household incomes and spending power.
(Reporting by Wayne Cole; Editing by Michael Perry)
