Top Scoops

Book Reviews | Gordon Campbell | Scoop News | Wellington Scoop | Community Scoop | Search

 

Weak services sector growth raises concerns about slowdown

Weak services sector growth raises concerns about NZ economic slowdown

By Rebecca Howard

May 20 (BusinessDesk) - New Zealand’s services sector activity slipped further in April, touching the lowest level in more than six years and adding to concerns about an economic slowdown.

The BNZ-BusinessNZ performance of services index fell 0.5 of a point from March to a seasonally adjusted 51.8. That was 3.9 points lower than a year earlier and the lowest reading since September 2012. The index remains below the long-term average of 54.4. A reading above 50 indicates expansion.

Services account for about two-thirds of the national economy and the index is "starting to struggle," said BNZ senior economist Craig Ebert.

BusinessNZ chief executive Kirk Hope said that the ongoing decline in expansion is a concern, exacerbated by a few factors during April, including extended holidays.

"The proportion of positive comments for April (43.9 percent) decreased significantly from March (55.8 percent). The decline was partly due to a number of comments centred on the ANZAC/Easter break disrupting usual business activity. Others noted a general economic downturn and slowing demand".

Ebert said unless there is a "sizable bounce" in May's result "we'll be left with the distinct impression of a slowing services sector." Overall, this is starting to "challenge the view that New Zealand's GDP growth will pick up through the course of 2019," he added.

"To the extent GDP growth does struggle, it could well encourage the RBNZ to respond with further monetary easing."

In terms of the sub-index values for April, activity/sales fell 1.2 points to 51.1, while employment fell 2.1 points to 48.6 and stock/inventories eased 1.4 points to 48.3.

In the other direction, new orders and business inched up 0.2 of a point to 55.1 while the supplier deliveries measure rose 0.7 of a point to 51.6.

The PSI's sister survey, the performance of manufacturing index, was released on Friday. It showed April's manufacturing activity expanded versus March but was well down from a year earlier as demand growth continues to cool.

Combining the two surveys, the composite index fell 0.1 of a point from March to 51.6 on a GDP-weighted basis. It was at 55.7 in April last year. On a free-weighted basis, the measure fell 0.4 of a point to 51.3. It was at 56.6 a year ago.

(BusinessDesk)


© Scoop Media

 
 
 
Top Scoops Headlines

 

Gordon Campbell: On The Saudi Oil Refinery Crisis

So the US and the Saudis claim to have credible evidence that those Weapons of Oil Destruction came from Iran, their current bogey now that Saddam Hussein is no longer available. Evidently, the world has learned nothing from the invasion of Iraq in 2003 when dodgy US intel was wheeled out to justify the invasion of Iraq, thereby giving birth to ISIS and causing the deaths of hundreds of thousands of people. More>>

ALSO:

Veronika Meduna on The Dig: Kaitiakitanga - Seeing Nature As Your Elder

The intricate interconnections between climate change and biodiversity loss, and how this disruption impacts Māori in particular. More>>

ALSO:

Gordon Campbell: On China And Hong Kong (And Boris)

In the circumstances, yesterday’s move by Lam to scrap – rather than merely suspend – the hated extradition law that first triggered the protests three months ago, seems like the least she can do. It may also be too little, too late. More>>

ALSO:

Dave Hansford on The Dig: Whose Biodiversity Is It Anyway?

The DOC-led draft Biodiversity Strategy seeks a “shared vision.” But there are more values and views around wildlife than there are species. How can we hope to agree on the shape of Aotearoa’s future biota? More>>

ALSO:

There Is A Field: Reimagining Biodiversity In Aotearoa

We are in a moment of existential peril, with interconnected climate and biodiversity crises converging on a global scale to drive most life on Earth to the brink of extinction… These massive challenges can, however, be reframed as a once in a lifetime opportunity to fundamentally change how humanity relates to nature and to each other. Read on The Dig>>

ALSO: