New Zealand's services sector increased in activity in August and the Performance in Services Index (PSI) reached 57.9 points in the month, the highest since December last year.
In Otago-Southland the BNZ-BusinessNZ PSI recorded 54 points for the region, the highest since May and well above the 48.1 points recorded in August last year. An index reading above 50 indicates expansion and below 50, contraction.
Otago-Southland Employers Association chief executive Virginia Nicholls said it was pleasing to see employment levels, orders-new business, stocks-inventory and supplier deliveries increase on last month. Activity sales levels were down slightly.
Health and community services had continued to thrive and the retail supermarket trade was experiencing steady sales.
Services to the construction industry were busy but they were finding it challenging to recruit skilled staff, she said.
Accommodation occupancy had been high and most tourist operators were experiencing positive sales. Restaurants and cafe activity had been steady.
BusinessNZ chief executive Kirk Hope said the proportion of positive comments for August was largely unchanged from July at 65.2%. Some respondents mentioned new customers and markets providing opportunities for growth.
BNZ economist Doug Steel said after July's dip to an average-looking 54.5 points, the PSI bounced back strongly in August.
Sales activity and new orders both ``punched'' above 60, which was very strong.
There was particular strength in the distribution industries of wholesale and retail trade.
``It all helps set the PSI three-month average at a healthy 56.3, comfortably above the long-term norm of 54.1.''
All industries sat well above the break-even level of 50, on an unadjusted three-month average basis. That was an uncommon occurrence in the nine-year history of the survey and indicative of the broad-based nature of the current service sector, he said.
It also applied geographically. All areas were above the 50 mark in August.
``Although Otago-Southland had the slowest growth across the regions in August, it was hardly slow at 54. This region still leads the service sector growth stakes on an annual basis, as has been the case for a good couple of years.''
