Services sector activity eased in Feb as new orders fell at a record rate

Doug Steel, Bank of New Zealand economist

Free audio stream, including stories that are padlocked on our site. Listen on any device, anywhere. Updated twice daily. The audio stream takes several seconds to start on Android devices.

Launch Radio player

New Zealand services sector activity, which accounts for about two thirds of the economy, eased to a six month low in February, as new orders fell at the fastest rate since the survey began in 2007.

The BNZ-BusinessNZ Performance of Services Index slipped to a seasonally adjusted 53.1 in February from 57.8 in January and 55.7 a year earlier. A reading above 50 indicates expansion. The measure of new orders slowed to 56.1 from 66.8 in January, which was a six-and-a-half year high.

"The service sector has been fair humming along," Bank of New Zealand economist Doug Steel said in a note. "Growth slowed in February, as can be understood following such a frantic pace in January. Looking through the monthly wiggles, growth trends in the service sector appear strong in early 2014."

The seasonally adjusted BNZ-BusinessNZ Performance of Composite Index, which combines the services and manufacturing indices and representing sectors which account for more than three quarters of the economy, suggests New Zealand's economy expanded at an annual growth rate of about 3 percent in the fourth quarter, accelerating to about 3.5 percent in the first quarter of this year, BNZ said.

New Zealand's fourth quarter GDP report is scheduled for release on Thursday, with economists polled by Reuters expecting the economy expanded at a 3 percent annual rate.

In the latest services index, Canterbury/Westland underperformed, suggesting the region may be hitting capacity constraints as its unemployment rate hit a five-year low of 3.4 percent in the fourth quarter, which could signal rising inflation pressures, the BNZ's Steel said.

Canterbury/Westland was the only region in contraction with an index of 43.4.

(BusinessDesk)


This article is tagged with the following keywords. Find out more about MyNBR Tags

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7529 0.0031 0.41%
AUD 0.9394 -0.0056 -0.59%
EUR 0.6639 -0.0065 -0.97%
GBP 0.4940 -0.0002 -0.04%
HKD 5.8365 0.0246 0.42%
JPY 89.9430 0.0150 0.02%

Commods

Commodity Price Change Time
Gold Index 1193.2 4.890 2015-05-05T00:
Oil Brent 68.9 0.350 2015-05-05T00:
Oil Nymex 60.4 1.460 2015-05-05T00:
Silver Index 16.6 0.138 2015-05-05T00:

Indices

Symbol Open High Last %
NZX 50 5787.8 5795.8 5787.8 -0.39%
NASDAQ 4956.7 4965.1 4939.3 -0.28%
DAX 11377.6 11457.9 11327.7 0.43%
DJI 17934.8 18019.8 17928.2 -0.40%
FTSE 6927.6 6974.8 6927.6 0.05%
HKSE 27698.1 28054.7 27755.5 -0.41%
NI225 19510.8 19549.4 19520.0 0.06%