Activity in the services sector continued its upwards momentum during April, according to the BNZ - BusinessNZ Performance of Services Index (PSI).
The PSI for April was 58.9. This was up 0.4 points from March, and the highest level of activity since November 2007 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). The PSI has now been above 58.0 points for three of the last four months.
BusinessNZ chief executive Phil O’Reilly said that the further upwards lift in expansion for the sector was another sign of the ongoing economic growth the country is currently experiencing.
“In recent months, the key sub-indicators of activity/sales and new orders/business have provided a strong platform for the overall result. However, both the March and April results have shown a more consistent spread of expansion, as stocks and supplier deliveries have also increased.”
BNZ senior economist Craig Ebert said this month’s PSI shows a consistent growth pulse by both region and industry.
“Overall it suggests New Zealand’s service sector is maintaining expansion at least as forceful as it was late last year. It also makes up for the slight under-performance of the PMI, although that was probably compromised by the timing of holidays.”
All five main sub-indices were again in expansion during April. New orders/business (65.7) continued its upwards momentum, while activity/sales (62.2) also recorded a consecutive post-60 value. Employment (53.4) slipped 0.9 points from March, while supplier deliveries (55.8) and stocks/inventories (55.6) recorded similar levels of expansion.
Activity was positive and consistent across all of the country in April. In the North Island, the Northern region (58.1) dipped slightly in expansion levels compared with the previous month, while the Central region (60.0) broke through the 60 point mark for the first time in 2014. In the South Island, the Canterbury/Westland region (60.3) increased 1.8 points from March, while the Otago/Southland region (56.3) decreased 3.1 points from the previous month, although remained in solid expansion.
The seasonally adjusted BNZ - BusinessNZ Performance of Composite Index or PCI (which combines the PMI and PSI) for April saw the two options for measuring the PCI show slightly different results from the previous month, although both remain at very healthy levels of activity. The GDP-Weighted Index (58.5) produced the same result as the previous month, while the Free-Weighted Index (57.3) dipped 0.9 points. The fact that manufacturing sector saw a decrease in the level of expansion during April meant the Free-Weighted Index experienced a stronger change than the GDP-Weighted Index.