New Zealand's service sector contracted for the first time since July 2010 last month, with the latest survey pointing to a slowing of economic growth in the second half of the year. New orders and sales led the decline.
The BNZ-BusinessNZ performance of services index (PSI) fell 0.4 points to 49.6 last month, the second lowest value for a September month since the survey began. A reading above 50 indicates expansion.
"The soggy September Performance of Services Index adds to recent indicators suggesting slower economic growth in the second half of 2012, following what was a very solid performance in the first half," BNZ economist Doug Steel said in a statement.
"We are more convinced that growth has slowed - the question remains whether it can bounce back through 2013 as generally positive consumer and business expectations suggest it will," he said.
New Zealand's economic slowdown means the bank has pushed out its timing for a hike in the official cash rate from the Reserve Bank until the end of 2013. Outgoing governor Alan Bollard kept the OCR at 2.5 per cent at his final review of monetary policy, saying the weak outlook for the country's trading partners threatens economic growth and the strong kiwi dollar.
