Monday 15th December 2014
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New Zealand's services sector expansion slowed in November, while remaining in expansion, adding to evidence the economy is slowing to a more moderate pace of growth.
The BNZ Business NZ performance of services index fell 2.2 points to 54.8 in November from October, and was from September, to be down from 57 in the same month a year earlier. The service sector, which accounts for about two thirds of the economy, has been in expansion since July 2010, based on the PSI, which uses a scale where 50 divides expansion from contraction.
The PSI data comes before gross domestic product figures for the third quarter, due on Thursday, which are expected to show the economy grew 0.7 percent in the third quarter, based on a Reuters survey, unchanged from the pace three months earlier and slower than the 0.9 percent rate the Reserve Bank forecast this month. It comes after the performance of manufacturing index last week, which showed a decline from a 15 month high last month.
Today's survey shows the performance of composite index, which combines PSI and PMI measures, fell in November. The GDP weighted index fell 3.2 points from October to 54, below the 56.4 level in the same month last year. The Free weighted index fell 3.2 points to 54, down from 56.9 a year earlier.
“There have been many drivers of service sector growth through 2014, not least the very strong net inward migration through the year," BNZ economist Doug Steel said. "More people equals more demand.”
For the sixth straight month, all five sub indices of the PSI were in expansion. New orders/business slipped to 56.4 from 61.1 in October, the lowest level since February. Activity/sales fell to 55.7 from 61.9 a month earlier, while stocks/inventories rose to 53.3 from 51,5 and employment rose to 53.2 from 53. Supplier deliveries fell 0.3 points to 52.8.
In the North Island, the Northern region fell 3.6 points to 55.5, while the Central region rose to 57.1 from 50.2. In the South Island, the Canterbury/Westland region slipped to 56.8 and Otago/Southland region fell to 65.3.
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