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

 

October Falls Flat For Service Sector Activity

October Falls Flat For Service Sector Activity

Media release
16 November 2009

After three months of expansion, the service sector fell flat during October, according to the BNZ Capital - Business NZ Performance of Services Index (PSI).

The PSI for October stood at 49.9, which were 3.3 points down from September, and the first time since June 2009 that activity was below 50.0. In comparison with previous years, the October result was 1.2 points up from October 2008, but 8.5 points down from 2007. A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining. The average PSI value for 2007 was 58.1, while for 2008 it was 49.1. So far for 2009, the average score has been 47.6.

Business NZ chief executive Phil O’Reilly said that despite a significant improvement in the key indicators of activity/sale and new orders/business during September, both fell back sharply in October, with the former retreating back into contraction mode.

“Despite the set back heading into the last quarter of the year, the result for October meant the sector largely stayed the same, so at least not a return to the significant contractionary periods experienced in 2008 and for most of 2009. Also, despite the flat result it was pleasing to see positive movement in employment, which had previously recorded decline for 19 consecutive months.

“The flatness in activity was also mirrored in comments by respondents, with many noticing a lull in their respective markets. No doubt for many, the approaching Xmas period may provide some relief, while the recently announced revised dairy pay-out may also provide an end of year boost for those sectors providing services in particular to rural communities.

BNZ Capital senior economist Craig Ebert said that while there’s not yet any clear signs of advancement in the Performance of Services Index nor the latest retail sales statistics, there’s a sense of stability forming in both.

“We believe an improvement is beginning to emerge, such that we’ll see some moderate expansion through the December quarter – in line with indications from the improvement in such things as consumer sentiment and the housing market. However, it’s nothing that looks particularly strong at the moment.”

The two major contributors to the drop in overall activity came from a 9.6 point fall in activity/sales (48.4) and a 6.0 point fall in new orders/business (52.6). In contrast, employment (50.4) displayed its first (albeit small) expansion since February 2008. Both stocks/inventories (47.0) and deliveries (49.1) remained largely unchanged from September.

Activity was positive for two of the four main regions during October, with the Canterbury/Westland region (54.5) leading the way with its highest level of expansion since December 2008. The Central region (51.6) jumped back to its level experienced in August, while the Northern region (48.9) fell 6.9 points after three consecutive months of expansion. The Otago/Southland region (47.5) improved on its previous months’ result, but remained the poorest performing region for the second consecutive month.

Link to the October PSI
Link to time series data.

ENDS

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

RNZ: Porirua Most Expensive Region To Rent, According To Trade Me

A rental website shows this town is now New Zealand's most expensive region to rent a house, ahead of Wellington and Auckland cities. More>>

ALSO:


Stats NZ: Nearly 1,000 More Big Businesses Now Than Two Decades Ago – Media Release

There are now 2,690 big businesses in New Zealand employing more than 100 staff – nearly 1,000 or 58 percent more than 20 years ago, Stats NZ said today. Over the 20 years to February 2020, the total number of enterprises in New Zealand increased ... More>>

ALSO:

RNZ: Housing Boom Could Get Worse, Economist Warns

Economists are calling on the Reserve Bank to reinstate lending restrictions, warning the housing market is spiralling out of control. More>>

ALSO:

Westpac: Sets Out Plan To Go Cheque-Free

Westpac NZ has announced details of its plan to phase out cheques, after signalling in May that it would be supporting a move to other forms of payment. Cheques will cease to be available as a means of payment after 25 June 2021. Westpac NZ General ... More>>

ALSO:

NZTA: Major New Zealand Upgrade Programme Projects Go To Tender

Two major New Zealand Upgrade Programme projects are beginning tenders for construction. The New Zealand Upgrade Programme is a $6.8 billion investment to get our cities moving, to save lives and boost productivity in growth areas. The first Auckland ... More>>

Reserve Bank: RBNZ Seeks To Preserve Benefits Of Cash

The Reserve Bank – Te Pūtea Matua is taking on a new role of steward of the cash system “to preserve the benefits of cash for all who need them”, Assistant Governor Christian Hawkesby told the Royal Numismatics Society of New Zealand annual conference ... More>>

ALSO:


CERT NZ: Malicious Computer Virus Targeting New Zealanders

CERT NZ, the government agency which supports organisations and individuals affected by cyber security incidents, says a recent surge of increasingly sophisticated malware attacks is affecting everyday New Zealanders as well as large organisations. The ... More>>

ALSO:

Economy: NZ Small Business Recovery Continues In September

Xero, the global small business platform, today released its Small Business Insights (XSBI) for September revealing an uptick in small business jobs and year-on-year revenue growth in New Zealand. Nationwide, the average number of jobs in the small ... More>>

ALSO:


Courts: Businessman Eric Watson Sentenced To A Four-Month Jail Term

New Zealand businessman Eric Watson has been sentenced to a four-month jail term in the UK for contempt of court, TVNZ reports. More>>

OECD: Area Employment Rate Falls By 4.0 Percentage Points, To 64.6% In Second Quarter Of 2020

The OECD area employment rate – the share of the working-age population with jobs – fell by 4.0 percentage points, to 64.6%, in the second quarter of 2020, its lowest level since the fourth quarter of 2010. Across the OECD area, 560 million persons ... More>>

Spark: Turns On 5G In Auckland And Offers A Glimpse Into The Future Of Smart Cities

Spark turned on 5G in downtown Auckland today and has partnered with Auckland Transport (AT) to showcase some of the latest in IoT (Internet of Things) technology and demonstrate what the future could look like for Auckland’s CBD with the power of 5G. 5G is ... More>>

Stats NZ: Monthly Migration Remains Low

Since the border closed in late-March 2020, net migration has averaged about 300 a month, Stats NZ said today. In the five months from April to August 2020, overall net migration was provisionally estimated at 1,700. This was made up of a net gain ... More>>