Christmas lead-up boosts service sector
The lead-up to Christmas has been credited for boosting the service sector in October.
BNZ-Business New Zealand’s Performance of Services index jumped 7.5 points to 57.4 in October and is the second highest October result in five years.
A PSI reading above 50 indicates the service sector is generally expanding. Below 50 indicates a decline.
BNZ economist Doug Steel says he wants to see more than just one month’s data to be sure of a genuine bounce.
However, he says it is the first step indicating a reasonable rebound after a soft patch earlier this year.
Business New Zealand chief executive Phil O’Reilly says last month they asked whether the Christmas season would help to grow the sector.
“Looking back at those who provided positive comments, this seems to be the case, along with various growth stories outlined citing a larger customer base, improving business efficiency and winning tenders.”
In September, only 47% of comments from those within the sector were positive. By comparison, 62% of comments were positive last month.
“Activity and sales and new orders were either struggling or heading in the wrong direction in recent months, so a strong turnaround for both to lift the overall result has come at the right time.”
Activity and sales led the recovery in October on 64.2, while new business and orders followed closely on 62.7.
Finished stocks fell to 51 in October, but it was still in positive territory.
Three of the four regions were in expansion during October. The northern region, on 60.7, continued its upwards momentum, with its highest value since November 2007.
In contrast, the central region showed almost no change from the previous month on 48.8.
In the South Island, the Canterbury/Westland region displayed its highest result since June on 56.