Activity in New Zealand’s services sector, which accounts for about two-thirds of the economy, rose last month to a near-record, with ongoing strength in wholesale and retail.
The BusinessNZ-BNZ performance of services index rose 1 point to 59.5 in January, above the long-term average of 54.1, and close to the record 59.7 from September 2015. Two of the five sub-indices increased, and all remained above the level of 50 that separates expanding activity from contraction, NewsNow reported.
“This is no one-month wonder. It continues the acceleration of late last year,” Bank of New Zealand economist Doug Steel said in his report. “The PSI’s three-month average has hit its highest level since the survey started back in 2007. There is swift, broad-based, growth occurring in the services sector.”
New Zealand’s economy has been underpinned by record levels of tourism and migration bolstering demand in the hospitality and retail sectors, coinciding with a pick-up in consumer spending.
New orders, which rose 2.9 points to 64.3, are at their highest level in three years, while stocks/inventories jumped 4.5 points to 57.4. Supplier deliveries were unchanged at 56.9, while activity/sales dropped 2.6 points to 60.8 and employment fell 1.1 points to 53.3.
The upbeat tone of the PSI offsets the weaker performance of manufacturing index last week, Steel said. The PMI slipped in January as the building sector’s momentum lost some of its ‘oomph’, dropping 2.6 points to 51.6, the lowest level of expansion since January 2015.
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