A survey measuring activity in the services sector has slipped into decline for the first time since being launched 13 months ago.
The Bank of New Zealand - Business NZ performance of services index was at 48.9 last month, a drop of 1.9 points from March and 9.4points lower than the same time last year.
A reading above 50 shows that the service sector is generally expanding, below 50 that it is declining.
Business NZ chief executive Phil O'Reilly said the April result was the first sub-50 result recorded.
It showed a clear change in economic conditions compared with 2007, as day-to-day business activities for many had been hit by falling confidence and increasing costs, he said.
BNZ senior markets economist Craig Ebert said that having held up remarkably well into the end of 2007, the April result showed the service sector has since started to struggle.
"A good part of this, of course, reflects the sector's very direct exposure to the crunch working its way through the household," he said.
Four of the five indices that make up the PSI showed some level of decline, with activity/sales (48.3) showing its first contraction.
Employment (44.7) followed on from its decrease in March, while stocks/inventories (46.9) and supplier deliveries (47.8) also recorded some level of contraction.
In contrast, new orders/business (55.3) picked up from March, but was still at its second-worst result.
Among sectors, the worst result was again accommodation, cafes and restaurants (39.2), continuing to slide in activity since the start of the year.
In contrast, both the health and community (55.6), and property and business services (54.5) sectors showed rises from March.
