Activity in New Zealand’s services sector slipped to its lowest level since 2012, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
The PSI for March was 52.9, which was 0.7 points down from February, and follows a drop of 2.7 points for the previous month (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). The March result was the lowest since December 2012, and below the long term average of 54.5 for the survey.
BusinessNZ chief executive Kirk Hope said that there were a couple of concerning elements that contributed to the easing off of service sector activity for March.
“New orders/business (54.9), which is a key component to overall activity, dropped to its lowest point since September 2012. Activity/sales (52.5) also slipped further, so all eyes will be on these key results in the months ahead to ascertain whether expansion continues its downward trend.
On the positive side, the proportion of positive comments for March (55.8%) was up on February (52.4%) and January (54.0%). However, many felt it was either business as usual or a general feeling of uncertainty with the current economy”.
BNZ Senior Economist Doug Steel said “the PSI trends remain ok, but a slower March reading heightens focus on the next few months to see if the slower pace is transitory or not”.
