Services sector slows in September, weighed by activity and sales
New Zealand's services sector, which accounts for about two-thirds of the economy, dipped in September, with activity and sales taking a tumble in a month dominated by the general election.
The BNZ-BusinessNZ performance of services index fell 1.2 points to a seasonally adjusted 56.0 last month. All of the five sub-indices were above the 50 reading that separates contraction from expansion. However, activity and sales dropped 6.1 points to 56.6.
Bank of New Zealand senior economist Doug Steel said while it was a "material slowdown," the survey "continues a volatile period for sales over the past six months, so we wouldn't jump to conclusions on one month's reading." However, with much lower house sales and softer signals from the likes of electronic card transactions over recent months it bears watching, he said.
The survey's employment sub-index increased 1.9 points to 54.1 while new orders/business shed 2.7 points to 60.3. Stocks/inventories were unchanged at 52.8 while supplier deliveries edged up 0.7 points to 53.5.
The PSI comes after its sister survey, the performance of manufacturing index, showed manufacturing activity continued to expand in September, largely shrugging off uncertainty surrounding the general election on September 23. The PMI fell 0.4 points to a seasonally adjusted 57.5 in September, extending its run of expansionary readings above 50 in every month since October 2012.
Coupled with the PMI, the PSI "suggests the economy maintained a decent amount of momentum in the third quarter," Mr Steel said.
The composite index, which marries the two surveys, slipped 1.2 points to 56.1 on a GDP-weighted basis and declined 1.1 points to 56.8 on a free-weighted basis