(BusinessDesk) - New Zealand's services sector growth slowed last month after a surge in activity in October, and is another indicator underlining what's been a tepid economic recovery.
The BNZ-Business New Zealand performance of services index fell 4 points to 54.1 in November. A reading above 50 indicates a sector is growing and a reading below 50 indicates contraction. The survey comes after last week's performance of manufacturing index showed that sector muddling along last month.
"The latest PMI and PSI outturns reflect an economy that is continuing to struggle, but despite that struggle, is making slowing progress," said Stephen Toplis, BNZ head of research. "As we head into 2014 we see the cash rate moving progressively back towards neutral as inflation pushes higher than RBNZ (Reserve Bank of New Zealand) expectations."
The BNZ-BusinessNZ performance of composite index, which combines the manufacturing and services indices, fell 5.1 points to 52.2 on a GDP-weighted basis, and 3.9 points to 51.2 on a free-weighted basis.
New orders/business grew at the fastest pace among the sub-groups at 58.1, followed by new activity/sales at 55.4, supplier deliveries at 52.22 and finished stocks at 51.7. Employment was the only sub-group to contract at 49.9.
The Otago/Southland region reported the fastest growth in the services sector at 61.7, followed by Northern at 61, then Central at 5. Canterbury/Westland activity shrank in the month, with a reading of 43.3.