Services sector gathers steam in April

New Zealand's services sector picked up momentum last month. Photo / Thinkstock
New Zealand's services sector picked up momentum last month. Photo / Thinkstock

New Zealand's services sector picked up pace in the last month, led by new orders, showing a divergence with last week's manufacturing survey that showed a marked decline.

The BNZ-BusinessNZ performance of services index (PSI) rose 2.5 points to 56.7 in April from March, to the highest since November last year. It was the second-highest reading for April since the survey began in 2007.

The PSI comes after a surprisingly weak performance of manufacturing index (PMI) last week that showed the lowest reading in six months and raised doubts about the sustainability of
New Zealand's economic recovery.

Economic data has been showing a mixed picture, with a rise in the jobless rate in the first quarter while retail sales fell.

New orders were the strongest sub-index in the PSI, at 60.5. Activity/sales rose to 56.1 and employment gained to 55.1, the highest since June 2007. Stocks/inventories rose to 53.8 and supplier deliveries advanced to 54.7.

"The fabric in April's PSI fundamentally went a long way to countering the weakness in the month's PMI reading," said BNZ economist Craig Ebert.

The seasonally adjusted BNZ-BusinessNZ Performance of Composite Index, which combines the PSI and PMI rose in the latest month, with the GDP-Weighted Index rising 1.1 points to 55.6.

- BusinessDesk

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