Boost for southern services sector

Education Minister Chris Hipkins at the Otago Polytechnic earlier this month. Photo: Peter McIntosh
Education Minister Chris Hipkins at the Otago Polytechnic earlier this month. Photo: Peter McIntosh
Numerous events and a warm end to summer helped underpin a huge boost to the Otago and Southland's services sector in February, which led the country.

The southern sector leapt from 51 points in January to 59.2 for February while nationally the upper and lower North Island turned in respectively 53.3 points and 55.1, while the upper South Island was at 48.5, the latest BNZ-BusinessNZ service sector index showed yesterday.

However, proposed changes to the running of the country's polytechnics are causing concern for students considering going to Otago Polytechnic or the Southern Institute of Technology (SIT).

Points above 50 reflect expansion, and below 50, contraction.

Otago Southland Employers' Association chief executive Virginia Nicholls said the southern score of 59.2 points was above the average from the past year, which in five instances recorded scores above 60.

''Events and consistent warm weather helped to increase sales to the hospitality sector,'' Mrs Nicholls said.

Businesses supplying services to house renovations and commercial properties had also been busy, she said.

Other services include to the construction industry, tourism, cafes and restaurants and education.

The southern result ran against the grain to national levels where the February result was below the long-term average of 54.5 points for the survey, BusinessNZ chief executive Kirk Hope said.

''Despite the January result getting 2019 off to a solid footing, the February result meant the survey fell back in line with recent expansion levels,'' Mr Kirk said.

The manufacturing sister-survey released last week also reflected buoyancy in the southern sector, albeit more moderate with a rise from below 50 to 53.3 points in February.

Mrs Nicholls said the vocational education review proposals by Education Minister Chris Hipkins were causing ''uncertainty'' for prospective international students who were considering enrolling at either Otago Polytechnic or SIT.

''Both organisations have well-known brands that students trust.

''There's uncertainty for these students about enrolling with a polytechnic that may not retain their own brand name when they finish their qualification,'' Mrs Nicholls said.

The regional breakdown in categories had orders/new business, employment levels and activity/sales levels in expansion, while 60% of respondents' comments were positive, she said.

Mr Kirk said the decrease in overall national activity levels also had the proportion of positive comments in February dip slightly from 54 to 52.4 points.

A number of negative comments focused on uncertainty in the market, along with slow demand. However, a number of positive comments outlined new business and strong demand for certain services, he said.

Add a Comment