Monday 19th December 2011
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New Zealand’s services sector expanded last month, led by new orders and sales, which were both at their highest levels since March 2010.
The BNZ-BusinessNZ Performance of Services Index rose 5.6 points to 56.6 in November. All five sub-indexes showed growth in the latest month.
The PSI was “stunningly higher” in the latest month, especially given its sister survey, the Performance of Manufacturing Index, sank to a 2 ½-year low in the same period. The index comes ahead of gross domestic product figures for the third quarter, due on Thursday, which is expected to show growth accelerated to 0.6 percent from barely registering growth with a 0.1 percent gain three months earlier.
“With a strong PSI and weak PMI posted for November we are really none the wiser to the actual pace of economic growth through late 2011,” said Doug Steel, economist at Bank of New Zealand. Still, the strength of the PSI was spread throughout the survey, suggesting a fundamental improvement rather than a one-off effect.
Data has tended to be volatile because of the impact of the Rugby World Cup, changes to the timing of school holidays, the earthquake recovery and the election, Steel said.
The latest PSI shows new orders/business jumped to 60.2 in November from 52.7 in October, while activity/sales climbed to 58.5 from 51.4. Employment grew at 53, from the previous month’s contraction of 49.9.
Supplier deliveries improved to 52.9 from 50.2 while stocks/inventories gained to 50.5 from 50.2.
The Composite Index, which combines the PSI and the PMI, rose to 54.2, on the GDP-weighted measure and on the free-weighted index improved to 50.6 from October’s contraction of 48.3.
The biggest gains in the PSI were in health & community services at 59.9 and wholesale trade at 59.4. Property and business services rose to 57.3, recovering from three monthly declines to the highest level since July.
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