Holding the line
14 July 2014
Holding the line
The services sector showed improved expansion levels in June, according to the BNZ - BusinessNZ Performance of Services Index (PSI).
The PSI for June was 54.7. This was up 0.6 points from May, with the PSI has averaged 56.1 points so far for 2014 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).
BusinessNZ chief executive Phil O’Reilly said that after a dip in expansion during May, the pick-up in expansion levels for June was based on various factors.
“While new orders/business experienced another slip in expansion levels, the other main sub-indices all improved during June. Also, the proportion of positive comments rose in June (62.1%), with most comments focussing on market growth, new customers and favourable seasonal patterns”.
BNZ Economist Doug Steel said the PSI has been a touch softer over recent months but remains above average and is consistent with ongoing optimism in the service sector.
All five main sub-indices were in expansion during June. New orders/business (58.3) reduced a further 2.0 points from May, but remained in strong territory for expansion. Activity/sales (54.7) rose 0.6 points after a dip in expansion during the previous month. Employment (52.4) also picked up, while stocks/inventories (55.2) rose 1.9 points. Supplier deliveries (53.5) went back into expansion after a slight contraction in May.
Activity remained positive throughout the country for the fourth consecutive month. In the North Island, the Northern region (52.8) dipped 2.7 points, while the Central region (58.3) recovered after a drop in expansion levels in May. In the South Island, the Canterbury/Westland region (52.3) remained in positive territory despite further easing of expansion, while the Otago/Southland region (56.1) picked up to levels similar to April.
The seasonally adjusted BNZ - BusinessNZ Performance of Composite Index or PCI (which combines the PMI and PSI) for June saw the two options for measuring the PCI improving for one, and holding steady for the other in comparison with the previous month. The GDP-Weighted Index (54.5) increased 0.6 points the previous month, while the Free-Weighted Index (54.1) remained exactly the same as May.