Aussie service contractors contracting

Services hurt by rates

The Australian Industry Group - Commonwealth Bank Performance of Services Index fell 3.5 points to 48.5 in November.

A fall below the key 50 level indicates contraction.

The combination of rising interest rates, falling consumer confidence, high petrol prices and the worsening drought are all taking their toll on the sector.

All sectors reported a decline in momentum in November. Retail trade was the least affected.

So, how does that go? Does the stock market follow or lead the economy? Or is the ASX stock market unconnected to the local economy?