After seven months in contraction, activity levels in New Zealand’s services sector saw expansion in March, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
The PSI for March was 51.6 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). This was up 2.7 points from February, but still below the long-term average of 53.6 for the survey.
BusinessNZ chief executive Kirk Hope said that after a difficult period for many businesses in the services sector, a return to overall expansion was welcomed. However, the underlying results show there is still some way to go to return to what many would consider business as usual.
“The two key sub-indexes of New Orders/Business (60.1) and Activity/Sales (53.8) both continued their upwards momentum. However, Employment (48.5) and Supplier Deliveries (40.1) remain in contraction. In addition, the proportion of negative comments stands at 57.5%, although this is down from 61.5% in February.”
BNZ Senior Economist Craig Ebert said that “despite some horribly weak components, the PSI supported the idea that GDP is on track to recover in Q2, after a flat-to-negative performance in Q1.”
