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Source: Reuters -
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The service sector has continued along its path of solid expansion for the second month of 2010, according to the BNZ-Business NZ Performance of Services Index (PSI).
The PSI for February stands at 53.7, up 0.6 points up from January and 7.4 points from a year ago.
Business NZ chief executive Phil O'Reilly says both the main result and the indices that make up the PSI continue to show growth in the right areas, with new orders-business levels remaining strong, and activity-sales lifting upwards.
"Comments from respondents continue to show distinct patterns, Negative comments remain short and concise with 'cash flow' and 'lack of demand' dominating. On the positive side, comments are specific, with many outlining new customers, stronger growth or taking opportunities that present themselves," he says.
"For many, the increase in activity-sales has been somewhat of a pleasant surprise, although most are conscious of any growth coming off a low base."
Bank of New Zealand economist Doug Steel says the sector's continuing recovery is encouraging for the wider economy, but not yet fast enough for strong jobs growth.
"We expect the unemployment rate to stay elevated for a while yet, but given where the economy has been over the last couple of years we have to walk before we can run."
Of the five sub-categories, three were in expansion mode, with only stocks-inventories (49.2) showing slight contraction after three consecutive months of slight expansion.
New orders (58.9) continued to lead the way with another strong result, while activity-sales (55.6) also picked up from January to record a value similar to December.
Employment (50.6) fell 2.1 points from January, but still remained in expansion for the fifth consecutive month. Supplier deliveries (50.0) slipped 0.3 points from the previous month to remain unchanged for February.
Activity was positive for three of the four main regions during February, with Otago-Southland region (55.7) just ahead of the Northern region (54.7).
The Central region (51.1) again fell back for the second consecutive month, while Canterbury-Westland region (46.8) experienced its first contraction since June 2009.
