Shrinkage in services sector

JANUARY sales for tourism, hospitality and accommodation in Otago and Southland were all lower than expected after a busy Christmas and New Year period, Otago Southland Employers Association chief executive Virginia Nicholls says.

The January Performance of Service index showed overall activity for the services sector for the region was 34.9 points, down from 53.2 in December. A PSI reading above 50 indicates that services are generally expanding; below 50 that it is declining.

In the regional breakdown all categories have declined which includes orders/new business, stocks/inventories, supplier deliveries, activities and sales levels and employment levels.

Bookings in February were, in many cases, very low, and, with the transtasman quarantinefree travel some way away, there was a need for a Government support package for the hardest hit in those sectors, Mrs Nicholls said.

‘‘We are now seeing some tourism and accommodation businesses making the decision to hibernate their business, waiting either until the winter season arrives, or the transtasman bubble opens,’’ she said.

Those servicing the construction sector were busy, and there were ongoing issues with delays with some imported products due to the supply chain issues.

Businesses were looking for a more efficient booking and allocation system at MIQ. There were too many empty beds, which was affecting businesses, workers and their families.

The Short Term Absences Payment (STA) where government support payment of $350 for those who could not work from home while awaiting a Covid19 test, had been welcomed by employers, employees and selfemployed people.

The arrival of the Covid19 vaccine had been welcomed by business, while the Government’s flexiwage initiative was also welcome news.