Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ service sector activity slows in May, still expanding

NZ service sector activity slows in May, still expanding

By Suze Metherell

June 16 (BusinessDesk) - New Zealand service sector activity, which accounts for about two thirds of the economy, dropped in May as supplier deliveries slipped into contraction, though the broader index continued to expand.

The BNZ-BusinessNZ performance of services index fell 4.3 points to a seasonally adjusted 54.2 in May, from a revised 58.5 in April and down from 56.4 a year earlier. A reading above 50 indicates expansion. The average reading for 2014 is 56.4.

Last week the Reserve Bank hiked the official cash rate for a third time this year to 3.25 percent and confirmed its track for future rises in a bid to head off inflationary pressures. On Thursday data is expected to show economic growth accelerated by 1 percent in the first quarter, according to economists and central bank forecasts, as gross domestic product is bolstered by rising net migration and as construction in Canterbury picks up.

"We think a big lift in construction activity in Thursday's national accounts will be complemented by a decent expansion in the service sector," Doug Steel, senior economist at BNZ, said in a note. "The very strong positive trends that have been obvious in building consents for some time are now finally showing up in actual construction activity."

Four out of five of the sub-indexes which make up the PSI were in expansion in May, with supplier deliveries the only sub-group in contraction with a reading of 49.5. New orders/business led activity at 60.6, followed by activity/sales at 54.3, its lowest level since January 2013, BNZ said. Employment was 52.4 and stock/inventories reported a reading of 53.1.

"While the main activity/sales, employment and new order indices all cooled a bit between April and May, all of them remain above long term averages," Steel said. "Combined with the majority of other indicators, it is indicative of an economy growing above potential and will generate inflation is left unchecked. It is why the Reserve Bank lifted interest rates last week and suggested more hikes ahead."

The PSI survey comes after its manufacturing counterpart, the PMI, fell for a second consecutive month as the measure of new orders dipped to its lowest since December 2012, while remaining in expansion.

The seasonally adjusted BNZ-Business NZ performance of composite index, which combines the PSI and PMI and represents more than three quarters of the economy, decreased 4 points from its April reading to 54 on a GDP-weighted index, while the free-weighted index recorded 54.3 for the month.

Across New Zealand all regions remained above 50 in May, with Northern reporting a 55.5 reading, Canterbury/Westland at 54.5, Otago/Southland at 51.3 and Central at 51.2.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Petrol Burns Prices: Second Consecutive Quarterly Fall For CPI

The consumers price index (CPI) fell 0.3 percent in the March 2015 quarter, following a 0.2 percent fall in the December 2014 quarter, Statistics New Zealand said today. The last time the CPI showed two consecutive quarterly falls was in the December 1998 and March 1999 quarters. More>>

ALSO:

Scoop Business: NZ Broadcasters Launch Battle Against Global Mode ISPs

New Zealand broadcasters have confirmed they’ve launched legal proceedings against internet service providers who give customers’ access to “global mode”, which allows customers access to offshore online content, claiming it breaches the local content providers’ copyright. More>>

ALSO:

Sanford: Closure Of Christchurch Mussel Processing Plant Confirmed

The decision comes after a period of consultation with the 232 staff employed at the Riccarton site, who were told on 9 April that Sanford was considering the future of mussel processing in Christchurch. Recent weather patterns had impacted on natural spat (offspring) supply... More>>

ALSO:

Price Of Cheese: Dairy Product Prices Fall To The Lowest This Year

Dairy product prices fell in the latest GlobalDairyTrade auction, hitting the lowest level in the 2015 auctions so far, as prices for milk powder and butter slid amid concern about the outlook for commodities. More>>

ALSO:

Houston, We Have An Air Route: Air New Zealand To Fly Direct To The Heart Of Texas

Air New Zealand will fly its completely refitted Boeing 777-200 aircraft between Auckland and Houston up to five times a week opening up the state of Texas as well as popular nearby tourist states such as Louisiana and Florida. More>>

ALSO:

Scoop Business: Reserve Bank’s Spencer Calls On Govt To Rethink Housing Tax

The Reserve Bank has urged the government to take another look at a capital gains tax on investment in housing, allow increased high-density development and cut red tape for planning consents to address an over-heated Auckland property market. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news