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

 

Service sector activity picks up in July

By Rebecca Howard

Aug. 19 (BusinessDesk) - Activity in the services sector improved in July to the highest level since January and inched above the long-term average.

The BNZ-BusinessNZ performance of services index rose 1.7 points from June to a seasonally adjusted 54.7 and was 1.5 points higher than in July 2018. The long-term average is 54.4. A reading above 50 indicates expansion.

"One should be cautious in reading too much into one month’s data, but the positive result is good to see and especially in the context of weakness appearing in a few other leading indicators," said BNZ senior economist Doug Steel.

Activity and sales lifted to 57.2 from 55, while the employment measure inched up to 51.7 from 51.0. New orders/business rose to 58.2 from 55.3 while stock/inventories lifted to 54.4 from 53.6. The only measure to decline - and remain in negative territory - was supplier deliveries, which eased back to 48.8 from 49.1.

The sales index "is now comfortably above its long-term average of 55.9 and is significantly above a recent low of 51.7 back in April. Also encouraging is the lift in new orders to 58.2, to be back in touch with historical norms," said Steel.

The better-looking PSI offers some hope that GDP growth in the service sector can hang together in the second half of the year, he added.

He noted, however, when combined with last week's soft manufacturing index "the combined measure continues to cast doubt on whether the economy as a whole can even grow at 2 percent never mind the 3 percent-plus that the RBNZ are forecasting for next year," he said.

The PSI's sister survey, the performance of manufacturing index, was released on Friday and showed that activity contracted for the first time in seven years as new orders dried up and job numbers tumbled. The index dropped 2.9 points to 48.2 in July, falling below the 50 level that separates expansion from contraction for the first time since September 2012.

Combining the two surveys, the composite index rose 1.2 points from June to 54.1 on a GDP-weighted basis. On a free-weighted basis, the measure fell 0.4 of a point to 52.1. The increase in the former was due to a lift in services sector activity, while the latter was dragged down by a fall in manufacturing activity.

(BusinessDesk)


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

NIWA: Scientists Say Methane Emitted By Humans ‘vastly Underestimated’

NIWA researchers have helped unlock information trapped in ancient air samples from Greenland and Antarctica that shows the amount of methane humans are emitting into the atmosphere from fossil fuels has been vastly underestimated... More>>

ALSO:

SMC Expert Reaction: Record Dry Spells And Effects On Forests

With no rain forecast before Sunday, Auckland is about to break a record for the city's longest dry spell. Niwa says Auckland is likely to hit 40 consecutive days without rain this weekend . The upper North Island is seeing severe meterological ... More>>

ALSO:

Reserve Bank: Official Cash Rate Remains At 1.0 Percent

The Monetary Policy Committee has decided to keep the Official Cash Rate (OCR) at 1.0 percent. Employment is at or slightly above its maximum sustainable level while consumer price inflation is close to the 2 percent mid-point of our target range. ... More>>

ALSO:



Science Media Centre: Novel Coronavirus Detected In China – Expert Reaction

The virus was detected after more than 40 people were hospitalised with pneumonia in Wuhan City, China and the outbreak traced to a large animal and seafood market. The Centers for Disease Control and Prevention reports that person-to-person transmission ... More>>

ALSO:

Science Media Centre: Flooding could release toxic gas – Expert Reaction

A chemical substance known as ouvea premix stored at an old paper mill in Mataura could release toxic ammonia gas if it comes in contact with water.More>>

ALSO: