Construction and retail sectors pushing ahead

Virginia Nicholls
Virginia Nicholls
The services sector in Otago and Southland has clawed its way back into expansion for May, with construction and retail making up for a decline in tourism services.

The monthly BNZ-BusinessNZ services index saw Otago Southland rise from a 49.4 score in April to 54.9, while nationally the index rose 5.6 points to 58.8.

Points above 50 reflect expansion, and below, contraction.

Otago Southland Employers' Association chief executive Virginia Nicholls said the 54.9 points were a ``positive'', following April's decline, but the regional category breakdown showed some mixed results.

BusinessNZ chief executive Kirk Hope said the national 58.8 score was a return to expansion levels seen during five of the past six months

``With the proportion of positive comments [68.2%] from respondents also at a very healthy level, we would expect continued expansion ahead,'' he said in a statement.

Mrs Nicholls said the regional activity and sales levels were high at 66.7, with orders and new business at 61.1 and supplier deliveries at 50 points.

``The drawback has been employment levels at 44.4, which reflects the difficulty experienced getting skilled staff.

``The stocks and inventories were low at 43.8, but this is a reflection of high activity sales levels,'' Mrs Nicholls said.

Retail had experienced a ``general lift'' in sales, and construction services continued to experience ``steady sales'' across residential homes and in the commercial sector, she said.

However, there was ``some mixed feedback'' in the food wholesale trade with some good demand, but equally increasing compliance costs and cold weather had a negative effect, Mrs Nicholls said.

``Those supplying the tourist operators have experienced an expected seasonal decline,'' she said.

Last week, the BNZ-BusinessNZ manufacturing survey for Otago and Southland posted a rebound to its highest level in six months, from a combination of dairy, construction, boat building and dairy-based foods.


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