Economy growing faster than usual

Craig Ebert.
Craig Ebert.
The economy appeared to be growing at a better than average pace, judging by the latest two indices published by the BNZ and BusinessNZ, BNZ senior economist Craig Ebert said.

The BNZ-BusinessNZ Performance in Services Index (PSI) grew 2.6 points in April to 57.7, the highest level of expansion since December 2015. A figure above 50 indicates expansion and the higher the number, the stronger the expansion.

The companion Performance in Manufacturing Index (PMI), released last week, also showed growth.

Mr Ebert said those combined measures indicated better than average economic growth.

The main driver of the index was activity/sales (63.2 from 59.9) and new orders (61.2 from 57.4).

"It's encouraging to see the PSI's employment index remain just over the 53 mark where it has been now for three months in a row. This continues to take up the only point of slack in the PMI with its job index lagging at 49.5.''

In Otago-Southland, the PSI fell slightly to 59.5 but still remained in strong expansionary territory, Otago-Southland Employers Association chief executive John Scandrett said.

Home, health and professional services performances for April were robust and within those sub-sectors, there were selected comments on good continuing forward work.

There was a mixed bag of comments within retail and wholesale activities where different operators were experiencing different trading outcomes, he said.

There was mention of growth elements favourably supporting some retail operations but new competition concerns were denting outcomes for other operators in the sector. The April orders/new business sub-index, while still in expansion mode, was down on previous months.

"We may have to accept there will be some local slowdown across the PSI scene in coming weeks,'' Mr Scandrett said.

BusinessNZ chief executive Kirk Hope said the other noteworthy factor was that, for the second month running, more than 73% of comments received were still along positive lines. Respondents outlined a broad number of reasons for influences on business activity.

The Canterbury-Westland PSI was 59.8 points, central was 59.1 and northern was 56.8.

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