No early start to shopping

Phil O'Reilly
Phil O'Reilly
Christmas shopping did not start early in the South, with November's Performance of Services Index (PSI) for the region staying low at 44.7, indicating continued soft trading and operating conditions.

The BNZ Business New Zealand survey figure for November was 51.4, up only 0.2 points from October, indicating business activity nationally was struggling to retain gains achieved earlier in the year.

November's 44.7 reading for Otago Southland followed a reading of 45.5 in October and 55.8 in September.

Business New Zealand chief executive Phil O'Reilly said while the country's services sector had expanded in the first half of the year, it had struggled in the second half, with readings of 51.2 in October and 55.1 in September.

A PSI above 50 indicates the service sector was generally expanding and below 50 indicates retraction.

Otago Southland Employers Association chief executive John Scandrett said the 44.7 reading for the South confirmed concerns the region was experiencing "soft trading and operating conditions".

"The November PSI outcome at 44.7 value points demonstrates that we are sitting at almost the same low point seen last month, as well as through the bulk of the year, and this is disappointing.

"Across the various sub-sectors, wholesale and retail activities are certainly experiencing sluggish performance patterns and when one looks closely at the survey diffusion data there is little optimism around the key elements of sales levels, deliveries and new orders."

He said the region's services sector would continue to experience volatility.

Mr O'Reilly said: "In terms of actual comments received from respondents, positive comments have highlighted certain businesses enjoying seasonal effects at this time of year, while good weather conditions have generally provided a boost to sales."

BNZ economist Doug Steel said while a flat result was not ideal leading up to Christmas, overall trends indicated the economy was recovering.

This was evident by the growth in new orders (54.4) and activity-sales (50.5).

The other three sub-indices, supplier deliveries (47.5), employment (48.8), stocks and inventories (49.9) all contracted.

The index for retail trade was 46.3, business services 52.5, health and community services 53.3 and accommodation, cafe and restaurant 50.

Northern led the index with 55.9 followed by central, 55.3, while Canterbury-Westland was behind the South on 44.6.


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