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Services activity picks up in January on new orders, sales

New Zealand's services sector picked up in January, though the gain was driven only by new orders and sales, while other measures were in contraction.

The BNZ-Business New Zealand Performance of Services Index rose 1.1 points to 52.6. New orders climbed to 57.6 from 55.4 in December and sales rose to 53.5 from 51.6.

Of the three other diffusion indexes, employment slipped back into contraction at 49.9, stocks/inventories held at 49.9 and supplier deliveries remained in contraction at 48.1.

The measure of services reveals mixed activity levels across various sector groups. Property and business services fell to 50.4, the lowest since September, and wholesale trade dropped to 50.1, the lowest since April last year.

By contrast, health and community services climbed to 59, the highest since March 2012.

The strength was all in the North Island. The Northern region recorded a treading of 50.9 and Central was at 54.4 while Canterbury/Westland was at 49.8 and Otago/Southland at a very weak 42.

"Activity is certainly patchy, with differences evident across regions, industries and size of business," Business NZ chief executive Phil O'Reilly says.

(BusinessDesk)