New Zealand’s services sector continues to grow for its 8th consecutive month, according to the June BNZ – BusinessNZ Performance of Services Index (PSI).
BusinessNZ chief executive Phil O’Reilly said while the improvement in June has kept overall sector expansion on a fairy steady and consistent level for eight months now, digging behind the main numbers shows some strong contrasts in terms of expansion and decline.
“The word patchy has been a well used recently to describe how many sectors have been performing, and this is certainly true when the June results are broken down by region, industry or size. Each indicator shows contrasts of strong expansion in some, compared with ongoing contraction in others. A return to levels of expansion before the global recession hit requires broad, consistent growth in all facets of the service sector.”
BNZ Senior Economist Craig Ebert said the survey was another indicator of the likelihood of reasonable growth.
“New orders were still champing at the bit, with a seasonally adjusted 59.0. The activity indicator was solid, at 57.9. Employment was a healthy looking 55.2 – the highest in three years. The laggard was inventories, with 50.2, but this is not necessarily a bad sign if it reflects stocks are simply being well managed.”
In contrast to the BNZ – Business NZ numbers, the Australian services sector continues to contract with the the Australian Industry Group/Commonwealth Bank Australian Performance of Services Index remaining below the 50 point mid-point up slightly at 48.8 points.
Australian Industry Group Chief Executive, Heather Ridout, attributed the poor result of the Australian PSI to successive interest rate increases from the RBA hitting services hard in Australia’s ‘two speed economy”.