New Zealand’s services sector recorded expansion in November, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
The PSI for November was 51.2 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). This was up 2.0 points from October, although still below the long-term average of 53.5 for the survey.
BusinessNZ chief executive Kirk Hope said that the last few months has seen the sector bounce between contraction and expansion. That degree of contrast was also evident with the key November sub-index results for New Orders/Business (52.3) remaining in expansion, while Activity/Sales (48.7) was still below the 50.0 point mark. Employment (51.0) recorded its highest result since May, while Supplier Deliveries (52.9) produced its highest result since March.
“The proportion of negative comments stood at 54.0% for November, which was down from 58.2% in October and 61.8% in September. Overall, negative comments continued to be pinpointed on key areas such as the economy, inflation and cost of living”.
BNZ Senior Economist Doug Steel said that “despite November’s lift, the PSI remains below its long-term norm of 53.5. And the combination of contracting activity/sales and rising inventories raises questions about the sustainability of the nudge higher”.
