Activity in New Zealand’s services sector dipped further in December, with the activity and sales sub-index reaching its lowest level since May 2014.
The BNZ-Business NZ performance of services index fell 0.4 points to 53.0 in December, below the long-run average of 54.5.
The PSI was more negative than its sister survey – the performance of manufacturing index – which hit its highest level since April in December. The seasonally adjusted PMI for December was 55.1, up 1.4 points from November. A reading above 50 separates expansion from contraction so any reading above 50 indicates growth.
The recent PSI results “adds to the sense that growth in the service sector has been slower over the past six months. But it is also important to recognise that it appears to be stabilising at this slower pace rather than slowing further,” said Bank of New Zealand senior economist Doug Steel.
He also noted that December was marked by possible trading day disruptions. While the month had 19 regular business days, it also contained “orphan” days around the statutory holidays and “these, while supposedly open for business, would have been prone to be taken as a holiday – for consumers and businesses alike,” he said.
The activity/sales measure eased to 52.2 points from 53.4, while that for employment was at 50.3 versus 55.5 in November.
According to Steel, the employment number was a “commendable result” given the widespread difficulty firms are having finding labour, according to the latest NZIER Quarterly Survey of Business Opinion.
The indicator for new orders/business rose to 59.2 from 57.5, while stocks/inventories was at 51.3 from 50.4 and supplier deliveries rose to 51.6 from 48.6.
The composite index – which combines both the services and manufacturing indices – lifted 0.1 points from November on a GDP-weighted basis to 53.6 and rose 1.0 points on a free-weighted basis to 54.9.