The services sector showed an upswing in expansion during July, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
The PSI for July was 58.4. This was up 3.2 points from June, with the PSI averaging 56.5 points so far for 2014 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).
BusinessNZ chief executive Phil O’Reilly said that the stronger pick-up in activity saw expansion levels back to levels last seen during March and April.
“The rise in expansion levels was across the board, with all sub-indexes and regional indexes showing growth. New orders/business was particularly strong, while activity/sales also moved back into significant expansion”.
“Looking at comments from respondents, those of a positive nature now sit at 65.8%, which has been trending upwards over the last few months.”
BNZ Senior Economist Craig Ebert said recent surveys suggest New Zealand’s service sector is in particularly good heart, with service sector firms looking to invest more in plant machinery, equipment and staff.
All five main sub-indices were again in expansion during July. New orders/business (64.1) improved 5.3 points after consecutive months showing lesser expansion. Activity/sales (61.4) rose 6.4 points and a return to levels of expansion last seen in April. Employment (54.0) rose from June, while stocks/inventories (53.1) was the only sub-index to drop, falling 1.9 points from the previous month. Supplier deliveries (56.5) rose 2.6 points to its highest result since June 2007.
Activity continued to remain positive throughout the country, with all regions showing improvement from June. In the North Island, the Northern region (58.3) rose 5.5 points, while the Central region (60.1) built on an increase from the previous month. In the South Island, the Canterbury/Westland region (57.5) tracked up 5.2 points from June, while the Otago/Southland region (65.4) experienced a significant boost in expansion.
The seasonally adjusted BNZ – BusinessNZ Performance of Composite Index or PCI (which combines the PMI and PSI) for July saw the two options for measuring the PCI both improve from the previous month. The GDP-Weighted Index (57.5) increased 2.6 points from the previous month, while the Free-Weighted Index (55.7) rose 1.3 points from June. The strong increase in activity for the services sector meant the GDP-Weighted Index increased more than the Free Weighted one.
Click here to view the July PSI & PCI
Click here to view the PSI time series data
Click here to view the PCI time series data
For media comment: Phil O’Reilly 04 4966552 or Craig Ebert 04 4746799
