The service sector result indicates the economy is still growing.
The service sector result indicates the economy is still growing.
The New Zealand service sector, which makes up about two-thirds of the economy, expanded in March, after a drop in February, led by gains in new orders and stocks/inventories.
The BNZ-BusinessNZ performance of services index increased 1.6 points to 57.6, with all five sub-indices remaining above the 50 level thatseparates contraction from expansion.
Last month's reading is slightly below the 57.7 recorded in the same month last year.
The services sector survey comes after the manufacturing series released last Thursday, which slipped slightly but remained in an expansionary mode for the 30th consecutive month. The combined result indicates the New Zealand economy is still growing, with the BNZ-BusinessNZ performance of composite index increasing 1.2 points to a GDP-weighted index reading of 57.1, while the free-weighted index slipped 0.4 points to 56.4.
"The service sector is expanding at a brisk pace," said BNZ senior economist Doug Steel. "This has been the case for a good two years now with even a hint of acceleration appearing of late."
All but one of the sub-indices rose in March, with activity/sales down to 60.1 from a previous reading of 62. New orders/business had the highest reading at 60.4, from 58.3, while stock/inventories jumped to 57.7 from 53.7. Employment gained two points to 54.8, while supplier deliveries increased 2.2 points to 53.8.
"A strong service sector bodes well for economic growth and employment," Steel said. "Labour demand is one thing, finding the people might be another with firms reporting difficulty finding staff."
• Performance of services index up 1.6 points last month to 57.6. • All five sub-indices are above 50, indicating expansion. • Activity/sales was 60.1. • New orders/business 60.4. • Stock/inventories 57.7. • Employment 54.8. • Supplier deliveries 53.8.
