Monday 18th April 2011
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Service industry activity was knocked back in the South Island following the February 22 Christchurch earthquake, while the North Island performed more strongly.
The pattern for the BNZ - BusinessNZ March performance of services index (PSI) published today was similar to that for the performance of manufacturing index (PMI) which came out last week.
The PSI had a seasonally adjusted reading of 50.8 for March, continuing a level of activity similar to that earlier in the first quarter. A reading above 50 indicates activity is expanding, while below 50 that it is contracting.
BusinessNZ said regional readings showed "a tale of two islands".
The Northern area had an unadjusted reading of 54.6, Central had 57.5, while both Canterbury/Westland and Otago/Southland were on 39.5.
BNZ senior economist Craig Ebert said the March PSI told a similar story to the manufacturing index.
"While the Christchurch earthquake has obviously wrought a big dent, the PSI had enough of a buffer beforehand to avert going negative," Ebert said.
Industry details were little surprise with retail down to 47.5, the accommodation, cafes and restaurants category slumping to 33.7, and cultural, recreational and personal services collapsing to 20.8.
"These results fit with the destruction and disruption to these types of businesses in and around central Christchurch."
There were some differences between the March PSI and PMI, with PSI production and new orders components generally holding up better, Ebert said.
In contrast, the PSI employment index was about flat, compared to a reasonably positive staffing index in the March PMI.
Despite that, the PSI employment index had, if anything, improved since late last year. Combined with the PMI equivalent that painted a picture of the jobs market holding together relatively well, in the circumstances.
"This suggests firms are looking through the near-term disruptions as best they can, to ongoing recovery underneath and ahead."
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