Growth in services slows down

The services sector, which accounts for about two-thirds of the economy, has been expanding since July 2010. File photo / NZME.

The services sector slowed in November while remaining in expansion, adding to evidence the economy is adjusting to a more moderate pace of growth.

The BNZ-Business NZ performance of services index fell 2.2 points to 54.8 in November from October, and was down from 57 in the same month a year earlier.

The services sector, which accounts for about two-thirds of the economy, has been expanding since July 2010, based on the PSI, which uses a scale where 50 divides expansion from contraction.

The PSI data comes before gross domestic product figures for the third quarter, due on Thursday, which are expected to show the economy grew 0.7 per cent in the third quarter, based on a Reuters survey, unchanged from the pace three months earlier and slower than the 0.9 per cent rate the Reserve Bank forecast this month.

It comes after the performance of manufacturing index last week, which showed a decline from a 15-month high last month.

Yesterday's survey shows the performance composite index, which combines PSI and PMI measures, fell in November. The GDP-weighted index fell 3.2 points from October to 54, below the 56.4 level in the same month last year. The free-weighted index fell 3.2 points to 54, down from 56.9 a year earlier.

For the sixth straight month, all five sub-indices of the PSI were in expansion. New orders/business slipped to 56.4 from 61.1 in October, the lowest level since February, while activity/sales fell to 55.7 from 61.9 a month earlier.