Sharechat Logo

NZ service sector contracts for the first time since July 2010

Monday 15th October 2012

Text too small?

New Zealand's service sector contracted for the first time since July 2010 last month, with the latest survey pointing to a slowing of economic growth in the second half of the year. New orders and sales led the decline.

The BNZ-BusinessNZ performance of services index (PSI) fell 0.4 points to 49.6 last month, the second lowest value for a September month since the survey began. A reading above 50 indicates expansion.

"The soggy September Performance of Services Index adds to recent indicators suggesting slower economic growth in the second half of 2012, following what was a very solid performance in the first half," BNZ economist Doug Steel said in a statement.

"We are more convinced that growth has slowed - the question remains whether it can bounce back through 2013 as generally positive consumer and business expectations suggest it will," he said.

New Zealand's economic slowdown means the bank has pushed out its timing for a hike in the official cash rate from the Reserve Bank until the end of 2013. Outgoing governor Alan Bollard kept the OCR at 2.5 percent at his final review of monetary policy, saying the weak outlook for the country's trading partners threatens economic growth and the strong kiwi dollar.

Today's PSI showed the reading for new orders/business was 52, the fourth consecutive fall and the lowest value since July 2010. Activity sales fell into contraction for the first time since December 2011. Employment and supplier deliveries both improved, albeit still in contraction.

The Northern region bounced back into contraction on 52.9 in August, while the Central region fell 9.2 points to 48.7 after seven consecutive months in expansion.

The BNZ-BusinessNZ Performance of Composite Index, which combines the PSI and the PMI, recorded a GDP-Weighted Index dropped 0.5 points to 49.1, the Free Weighted Index was 48.8. That's the first time both indices have been in contraction since the middle of 2009.

Last week's, New Zealand's manufacturing activity shrank to 48.2 in September, for a fourth month from 47.2 in August as new orders fell to the lowest level since May 2009. Four of the five seasonally adjusted diffusion indexes were in contraction in September.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
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:

Further Contract Win Strengthens Scott Technology’s Position In Mining Sector
China’s Assertiveness Is Becoming a Problem for Its Friends, Too
New Talisman - Chairman’s Address to AGM 2020 August 6, 2020
T&G reports its 2020 Interim Results
Gold price hits $2,000 for first time on Covid
TruScreen strengthens its market presence in central and eastern Europe
Refining NZ announces non-cash impairment
Ryman Healthcare COVID-19 update Victoria
Talisman Quarterly Activities Report to 30 June 2020
General Capital gives notice of Annual Meeting

IRG See IRG research reports