The Otago-Southland services industries have bounced back from months of inactivity to record strong growth in September, the BNZ-Business NZ performance of services index shows.
Otago-Southland Employers Association chief executive John Scandrett said the regional index went to 55.8 points in September, up from the 47.2 reading in August.
"This forward movement is a welcome far cry from the extremely low 38.7 points seen in June and even against the improved July outcome of 46 points."
A reading of above 50 indicates expansion and below 50, contraction.
Mr Scandrett said the local September survey brought the region back into line with the national averaged tracking patterns.
The renewed confidence being seen across business services, media interests and tourism-related parties was welcome.
"While happy to see this apparent expansionary trend, our excitement will be contained for some several more months or until we are truly confident that the volatility has disappeared from the services sector - especially from the retail component of the sector," he said.
Nationally, Otago-Southland ranks second behind the northern region, which has 58.5 points.
The national index is 54.8 points.
BNZ economist Doug Steel said the PSI improvement was an encouraging sign following a string of generally weak and disappointing economic indicators for the second quarter of the year and much of the third quarter.
The economy had slowed to a crawl in the second quarter, with just a 0.2% increase in GDP for the three months ended June.
Since then, much of the monthly data, mainly for August, had maintained a sombre tone.
"An awful-looking and large drop in building consents, fewer accommodation guest nights and further weakness in core retail sales spring to mind.
"This is what makes the bounce in September's PSI important. While only time will tell if it's the forerunner to a more general economic improvement into the end of the year, for now, at least, it has broken the run of weaker data that prevailed for the early part of the third quarter," Mr Steel said.
