Service industry growth slows
Growth in the service sector has slowed, with activity at its lowest level since November 2010, according to a Bnz-businessnz survey.
The Performance of Services Index (PSI) for December was 50.6 points, in positive territory but well down on November’s strong result of 56.2.
A score above 50 indicates sector companies are expanding while a score below 50 suggests shrinkage.
Bank of New Zealand senior economist Craig Ebert said that although growth had slowed, the trend was still positive, with employment intentions, which scored 52.7, a particular bright spot.
‘‘This survey’s constructive view on staffing is encouraging and corresponds with other surveys produced in the last couple of months, all signalling ongoing growth on the jobs front.’’
The results suggested employment growth would ‘‘mosey along at about a 2 per cent annual pace in 2012’’, Mr Ebert said.
Businessnz chief executive Phil O’reilly said the index had ended 2011 with a whimper rather than a bang, similar to its sister survey, the Performance of Manufacturing Index.
‘‘While the PSI has now remained in positive territory for 26 consecutive months, it has struggled to push any higher than moderate levels of expansion.
‘‘The results for December and October indicate that the sector may struggle for stronger expansion in the near future,’’ Mr O’reilly said.
For the first time since August, only three of the five sub-indices expanded in December; new orders and business, employment, and stocks and inventories.
Activities and sales declined for the first time since July 2010, and supplier deliveries contracted for the first time since March last year.
All four regions reported expansionary activity; with Canterbury-westland leading at 55.3, followed by the central region, which includes Wellington, at 54.5.