PSI falls to 52.7 in June

Activity in New Zealand's services sector softened in June, adding to a picture of lacklustre economic growth.

The BNZ-BusinessNZ performance of services index fell 0.8 of a point in June from May to a seasonally adjusted 52.7.

That was 0.3 of a point lower than a year earlier and remained below the long-term average of 54.4. A reading above 50 indicates expansion.

BusinessNZ chief executive Kirk Hope said the reading was "symptomatic of a lacklustre first half of 2019 for the sector".

He said that while the index "has yet to get very close to the no change mark of 50, nor has it shown any signs of building momentum to pick up pace".

The stock/inventories sub-index fell 3.6 points to 53.3, while the new orders and business eased 1 point to 54.8.

The activity/sales measure was down 0.2 of a point at 54.7, while employment rose 0.3 of a point to 50.9. The supplier deliveries measure fell 2 points to 49.4.

In Otago-Southland, overall activity in the region's services sector was 50.8, which was below the average for the past 12 months of 54, Otago Southland Employers Association chief executive Virginia Nicholls said.

The regional breakdown in categories had activity/sales levels in expansion above 50 and orders/new business were the same.

Businesses in Central Otago would like a long-term plan around transport infrastructure to reduce the time it was taking to move around the region, Ms Nicholls said.

It was encouraging to see more film crew in the region, which was creating more local benefits and promotion, in some cases, to an international audience.

Immigration NZ's processing times for visas was still causing concern for business, she said.

The PSI's sister survey, the performance of manufacturing index, was released on Friday and showed a slight recovery on the back of new orders, up 0.9 points to a seasonally adjusted 51.3 from May. BNZ described the activity as below par.

-BusinessDesk/additional reporting Sally Rae

 

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