Sharechat Logo

Solid but not spectacular

Monday 17th December 2012

Text too small?

The service sector remains in expansion mode, but not at the level as last month, according to the BNZ - BusinessNZ Performance of Services Index (PSI).

The PSI for November was 54.1.  This was down 4.0 points from October, although still higher than results from June to September (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).  Compared to previous November results, the 2012 value was the third highest recorded since 2007.

BusinessNZ chief executive Phil O’Reilly said that the comments from respondents outline a distinct difference when examining those who have seen activity expand, compared with those that have not.

“In November, 65% of comments were positive, compared with 62% in October and 47% in September.  The increase is obviously good news, but the types of comments received are more specific to a particular reason such as better weather conditions, detailed Xmas prospects or certain tourist opportunities on the scene.  In contrast, those still struggling are often more general in their comments, with a lack of customers/orders being the primary concern.”

BNZ Head of Research Stephen Toplis expects 2012’s theme of slow progress, despite continuing struggle, to continue into 2013.

“New Zealand’s economic outlook for calendar 2013 is unspectacular, but against a global backdrop of significant distress, this is not a bad place to be.

“We are forecasting GDP to expand an annual average of 2.3%, mainly due to significant forecasted increase in construction activity. This will be accompanied by heightened consumption in durable goods.” 

The seasonally adjusted BNZ - BusinessNZ Performance of Composite Index or PCI (which combines the PMI and PSI) for November continued to show the two options for measuring the PCI in expansion, although down from October.  The GDP-Weighted Index (52.2) decreased 5.1 points from October, while the Free-Weighted Index (51.2) fell 3.9 points over the same period.  While the pick-up in the unadjusted manufacturing sector assisted in boosting both PCI indices, the results were not strong enough to see uplift once seasonal factors were taken into account.

Four of the five main sub-indices were in expansion during November.  New orders/business (58.1) led the way, but was down 4.8 points from the previous month.  Likewise, new activity/sales (55.4) fell back 9.0 points, although remained in healthy expansion.  In contrast, employment (49.9) dropped 2.1 points to stand at all but no change for November, while supplier deliveries (52.2) kept its head above the no change mark.  Finished stocks (51.7) remained very consistent with previous recent results, with a range of only 1.7 points since May.

Three of the four regions were again in expansion during November.  In the North Island, the Northern region (61.0) continued to build on its previous monthly result with its highest figure since November 2007.  The Central region (55.0) bounced back from consecutive monthly declines to indicate expansion at similar levels during the middle of the year.  In the South Island, the Canterbury/Westland region (43.3) fell back sharply, while the Otago/Southland region (61.7) showed on-going momentum after a pick-up in October.

Link to the November PSI & PCI

Link to PSI time series data

Link to PCI time series data

Link to the PMI and PSI release schedule for 2013.

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar mixed, buffeted by Fed talk and downunder data
Super Fund can expect lower returns over next decade - review
ANALYSIS: Should penalties for continuous disclosure breaches be relaxed?
Fletcher seeks urgent talks on Ihumatao stalemate
NZ economy grows 0.5% in June quarter, beating expectations
Restaurant Brands lifts 2Q sales; appetite for KFC offsets ditched Starbucks
Auckland jet fuel arrangements a potential barrier to new entrants
NZ dollar weaker after Fed split on outlook for further US cuts
Leading judge says court administration model 'outdated'
MARKET CLOSE: NZ shares fall; Goodman placement sees property stocks sold

IRG See IRG research reports