Services sector expands at fastest clip in five months
New Zealand's services sector, which accounts for about 70 percent of economic activity, last month expanded at the fastest pace since October, led by activity/sales.
The latest BNZ-Business New Zealand Performance of Services Index (PSI) rose 0.5 points to 56.1, the highest for the month of April since the survey began in 2007. A reading above 50.0 indicates the service sector is generally expanding, below 50.0 that it is declining.
The PSI survey follows last week's Performance of Manufacturing survey, which showed a solid 54.5 and helps underline the track for positive economic growth this year even after drought disrupted farm production.
Bank of New Zealand is forecasting the economy grew 0.7 percent in the first quarter after the fourth quarter's 1.5 percent surge.
"Reponses to the PSI and PMI for April tell of ongoing expansion of the real economy this year, after a perky finish to 2012," BNZ economist Craig Ebert says. "This supports our expectations of a good gain in GDP over the first half of 2013, in spite of the damage from the drought earlier in the year."
Sales/activity climbed 4.9 points to 62.6 in the April PSI, while new orders/business rose to 60.7 and supplier deliveries rose to 53.3. Employment dropped 1.8 points to 51.3 and stocks/inventories fell 2.2 points to 47.1.
The central region, including Wellington, returned to positive territory at 58.4, the highest since March last year. Northern slipped by 1.8 points to 55.4, while Canterbury/Westland fell to 49.9 and Otago/Southland eased to 50.8.
Property and services recorded the strongest April at 58.6 and retail trade picked up to 56.4. Wholesale trade fell to 51.9 and health and community services dropped to 49.3.