Activity in the service sector last month pushed up to its highest level since November 2007, a new survey shows.The BNZ -- Business NZ performance of services index (PSI) was at 57.3, up 3.6 points from February and up 10.2 points from March 2009. A PSI
Activity in the service sector last month pushed up to its highest level since November 2007, a new survey shows.
The BNZ -- Business NZ performance of services index (PSI) was at 57.3, up 3.6 points from February and up 10.2 points from March 2009. A PSI reading above 50 indicates the service sector is generally expanding.
Among sub-indices, the activities/sales category had a reading of 62.9, the first time it broke through the 60-point mark in 28 months. New orders rose 3.8 points from February to 62.7, employment at 51.9 recorded its sixth consecutive expansion, and deliveries improved to 53.1 after two months indicating little change.
The stocks/inventories sub-index remained in contraction.
Business NZ chief executive Phil O'Reilly said the proportion of positive comments from survey respondents was heading in the right direction, with a clear majority now finding favourable influences in their day-to-day business activities.
The proportion of positive comments rose to 62.9 percent, from 57 percent in February.
Mr O'Reilly said many businesses were still finding trading conditions tough, but at least the focus for many had moved away from lack of demand and general economic uncertainty.
The upbeat indications for the services sector come after the performance of manufacturing index for March, published last week, showed manufacturing activity also expanding at its fastest rate since November 2007.
Today BNZ senior economist Craig Ebert said the services sector was mirroring the positive inventory/orders/production dynamics seen in the manufacturing index.
While services had not had the same kind of big hit that manufacturing did, services also did not have the direct leverage to a robust Australian market and a relatively low NZ dollar compared to the Australian currency.
With further signs that service sector inventories were well under control, having been reduced quite aggressively through the heart of 2009, the improving orders and demand were feeding directly into additional production, Mr Ebert said.
The retail component of the PSI rose to 52.3 in March, while accommodation, cafes and restaurants ticked up to 54.2.
Other sector messages from the PSI were even stronger with wholesaling, communication, property and business services, health and community, and the miscellaneous other category all "particularly perky" around the 60 mark.
