NZ Service Sector Improving
March 15, 2010 New Zealand Finance
New Zealand’s service sector showed signs of expansion during the month of February, both in comparison to the same period in 2009 and January 2010.
According to the newest NZ Performance of Services Index (PSI) report released by BNZ-BusinessNZ, the New Zealand service sector has seen two periods of expansion in 2010, following overall contractions in 2009 and 2008. The BNZ report includes a compiled index which quantifies sector growth and sentiment, the February figure stood at 53.7. Scores of over 50 signify a pattern of growth, while anything below indicates falls. The PSI score for January was reported as 53.1, the average figures for 2009 and 2008 were 48.8 and 49.1 respectively. The last positive yearly average was in 2007, with 58.1.
Doug Steele, Bank of New Zealand Chief Economist, commenting on the findings said that the continued recovery seen in the service sector is a good sign for the wider economy, although the growth was not yet strong enough to sustain continued job creation.
Phil O’Reilly, BusinessNZ Chief Executive, said that cash flow problems and lack of demand the most common explanation of poor performance given by the PSI survey respondents. Conversely, new customers and stronger growth were the most repeated positive sentiments.
Regionally, Otago and Southland show the greatest expansion levels, with a PSI score of 55.7. The Northern and Central regions followed with 54.7 and 51.1 respectively. Canterbury and Westlands were the only contracting area, at 46.8 on the PSI index.
Photo by Chris Gin