Services sector flat in December

While Otago-Southland remained on the right side of the expansionary versus contraction band in the latest BNZ-BusinessNZ Performance of Services Index, there was a ''mixed range'' of survey feedback.

The region had a 53.4 value point PSI for December, returning to levels of activity similar to those seen in October.

The majority of operators across tourism, property services and construction-decorating sectors were satisfied with market performance.

However, the overall level of wholesale trading, in a wide-range of sub-sector applications, seemed to have failed to generate ''any real excitement'' from a business perspective, Otago Southland Employers Association chief executive John Scandrett said.

As expected, given the mediocre aggregated PSI result, the sub-indices readings all hovered close to 50 point break-even margins.

The employment sub-index, on balance, was ''marginally'' ahead of the other results and that was a promising sign, given the relatively sluggish nature of overall sector performance, Mr Scandrett said.

It was interesting the December services sector activity levels, across the country, remained relatively flat and did not, in any region, deliver the robust trading outcomes usually associated with the festive season, he said.

The seasonally adjusted BNZ-BusinessNZ Performance of Service Index (PSI) nationally for December was 51.5, down 2.7 points from November and down 6.3 points over the last two months.

BusinessNZ chief executive Phil O'Reilly said 2012 had been mostly positive for the service sector, although the second half of the year provided mixed results.

When comparing the PSI with its sister survey the PMI, the service sector had held up, despite another difficult trading year. However, 2012 had ''ended with more of a whimper than a bang'' as new activity-sales slowed and employment remained lacklustre.

BNZ economists said the most positive message to take from the December results was the jobs growth area.

''The PSI staffing index is decently above the line. When combined with other pointers to jobs across the economy, we have good reason to believe employment growth is in the throes of picking up, perhaps to as much as 2% for 2013 as a whole. This would amount to an addition of about 45,000 jobs,'' the bank said.

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