New Zealand's service sector accelerated for a fourth month in May, led by new orders and sales, adding to signs that the commodity export boom is starting to seep through into the broader economy.
The BNZ-BusinessNZ Performance of Service Index edged up 0.2 points to 52.8 last month, the highest reading since September last year. Of the five major sub-indexes, new orders/business climbed to 56.4 from 54 in April, while activity/sales rose to 55.7 from 53.
The services survey follows the survey of manufacturing on June 16, which recorded its highest reading in almost a year as commodity prices measured by the ANZ index reached a record high.
Reserve Bank Governor Alan Bollard said at his quarterly review of monetary policy this month that interest rates could start rising before year-end, dependent on upcoming data.
"The recovery could best be described as lumpy, with certain regions and sub-sectors struggling to break into expansion mode," BusinessNZ chief executive Phil O'Reilly said in a statement.
While businesses are "still tentative" about hiring new workers, "a pick-up in new orders/business for May may help feed through into the other indexes over the next few months."
The PSI employment sub-index fell to 50.8 in the latest month from 53 in April. Supplier deliveries were unchanged at 50.3 and stocks/inventories sank to 47.4 from 53, the only index to register a contraction.
Across the four regions, only Otago/Southland was in contraction in May, with a reading of 39.3.
The Central region recorded the strongest growth at 56.6 and Northern was at 52.1. Canterbury/Westland recorded 50.2.
The composite index, which combines the results of the services (PSI) and manufacturing (PMI) surveys continued to show a slow, steady improvement, at 53.1 in May on the GDP-weighted basis, from 52.6 in April, while the free-weighted index rose to 53.9 from 52.6.
NZ service sector accelerates for fourth month
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