A lift in new orders and business contributed to New Zealand's services sector experiencing a rise in activity in May, in contrast to many of the country's other economic indicators.
The BNZ-BusinessNZ Performance in Services Index (PSI) rose 0.9 points to 57.3 in May. A PSI reading above 50 represents a sector expanding.
The current buoyancy in the PSI was in contrast to some other indicators such as negative business confidence and wavering electronic card transactions in recent months.
BusinessNZ chief executive Kirk Hope said the past three months had shown healthy activity in the sector, and were certainly up on the activity for the three months prior.
Otago-Southland Employers Association chief executive Virginia Nicholls said overall activity for the region's service sector last month was 60.2 points, above the corresponding month last year and close to the average from last year of 59.7.
The regional breakdown in categories had orders/new business and activity/sales levels above 50. Employment levels, stocks/inventories and supplier deliveries were all at 54.
``Tourist operators are reporting a steady month, helped by a strong event calendar across the region. Businesses providing services to the construction industry have been busy.''
The proportion of positive comments in May was 63%.
Canterbury Employers Chamber of Commerce had the highest reading in the country on 60.4, followed by Business Central on 58.8 and Northern EMA on 52.
Nationally, new orders/business were at their highest level since January 2017 at 64.6 points.
Mr Hope said although the proportion of positive comments in May of 58% was down from the 65.1% recorded in April, comments received took into account the boost in new business. Many outlined more bookings, increased capacity to work more hours and new client acquisitions.
BNZ senior economist Doug Steel said the positive signals in May from the PSI reinforced improvements noticed in the index in recent months, following a weaker patch earlier in the year.
``There was a lot to like in May's PSI. First, the headline reading edged up to 57.3. This indicates the service sector is not only expanding at a solid rate but has even accelerated a little.''
New orders surged higher to a strong 64.6 - a reading only bettered twice in the past 10 years. It signalled good demand for services and was encouraging for future sales.
Employment nudged up following a slower period in recent months. Firms were encouraged by more sales and new orders appearing in May.
