New Zealand's services sector activity has come off the highs seen in September but is still showing expansion.
Given the previous month was at near-record highs, some reduction in expansion in October was not a surprise, BusinessNZ chief executive Phil O'Reilly said yesterday.
The BNZ-BusinessNZ seasonally adjusted performance of services index for the month was 56.2, 2.8 points lower than in September, and similar to levels of activity experienced in July.
A PSI reading above 50 indicates the service sector is generally expanding; below 50, it is declining.
Key indicators of activity/sales (57.6) and new orders/business (57.1) remained in healthy territory and boded well for a strong year for the sector, Mr O'Reilly said.
BNZ senior economist Craig Ebert said the PSI and the performance of manufacturing index (PMI) still gave the impression of an economy growing at a ''comparatively solid pace'' at the outset of the fourth quarter, following a ''champing performance'' through the third quarter.
In the South, regional PSI sat comfortably in an expansion band at 55 points, but there was still quite mixed sentiment in some areas of activity.
Retail and wholesale operators, in particular, were seeing ''varying fortunes'', Otago Southland Employers Association chief executive John Scandrett said.
In some cases, positive comments were based on early Christmas trading preparation but there was negative feedback about limited tourist flow in Dunedin, the end of the university year and, in one situation, the effect of a competing start-up, Mr Scandrett said.
Property and business services and construction sub-sector reports sat firmly ''on the positive side of the fence''. Sales and new business data supported expansion in the sector generally but stocks and inventory levels were quite high, perhaps indicating some softening around the corner, he said.
