An early Christmas rush has helped give a substantial boost to the Otago-Southland service industry, along with the rest of New Zealand.
The BNZ Capital-Business New Zealand performance of services index for November showed the national index reading jumped from 49.9 in October to 56 in November.
For Otago-Southland, the jump was even more significant with the index rising to 59.4 in November from 47.5 in October.
A reading above 50 represents an expansion in activity and below 50 a contraction.
Otago-Southland Employers Association chief executive John Scandrett said when he presented the disappointing October index results, he tabled a forecast opinion that the run into Christmas could mean stronger regional activity.
"It appears that in the case of the November survey at least, the prediction that we would break the 50-point barrier has indeed been realised."
In reviewing the data, the most positive results were across the activity-sales and new orders-business classifications, he said.
But through all sub-index and regional analysis, there was a central theme presenting evidence of business expansion.
However, the index was not without some negative comments.
They included lingering references to the recession and an absence of demand and lower margins.
"Given these comments, there are clearly some in the service industry who do not expect to see strong business improvement in the near future," Mr Scandrett said.
BNZ Capital markets economist Stephen Toplis said although the November figures seemed prone to a seasonal rush of blood, they could not rule out the fact the sector was significantly more optimistic than it was one year ago.
The increase in the total index was being led by substantial improvements in expectations for activity and new orders.
They were also consistent with the BNZ's expectations the economy would grow by 2.5% in 2010 and 3.4% in 2011.
However, Mr Toplis warned there was a prospect of rising interest rates.
"Just three months ago, the Reserve Bank had said there would be no rate hikes until December 2010, at the earliest.
Now, it is intimating June is the most likely starting point with April, or even March . . . [possible]."
