NZ services sector improves in August
New Zealand's services sector, which accounts for about two-thirds of the economy, grew at a faster pace in August, with all five sub-indexes and geographic areas improving.
The BNZ-BusinessNZ performance of services index rose 3.4 points to a seasonally adjusted 57.9 last month, its highest level since last December.
All of the five sub-indexes rose, and were above the 50 reading that separates contraction from expansion.
The PSI comes after its sister survey, the performance of manufacturing index, expanded at a slower pace for a second consecutive month in August, although it remained in expansion.
The performance of composite index, which combines the two measures, increased 3.1 points to 57.8 on the GDP-weighted basis, and edged up 1.3 points to 56.8 on a free-weighted basis.
"The widespread positivity in August's PSI combined with the overall good-looking Performance of Manufacturing Index from last week indicates above trend economic growth has continued," BNZ economist Doug Steel said.
"The latest growth figures included a big lift in domestic demand. More growth seems likely here given the signals from the PSI overall and the distribution sector in particular."
Supplier deliveries moved out of a previous reading of contraction in August, up 8.9 points to 56.4, helping drive expansion in the services sector last month. Stocks/inventories recorded a reading of 55.9, activity/sales 61.6, new order/business 60.8 and employment 54.3.
"All industries sit well above the breakeven level of 50, on an unadjusted three-month average basis," Steel said.
"This is a relatively uncommon occurrence in the nine-year history of the survey and indicative of the broad-based nature of the current service sector expansion. This also applies geographically, with all areas firmly above the 50 mark in August."
Central was the strongest region at 61.7, while the slowest growing region, Otago-Southland, registered 54.
Employment's strength was a useful offset against the dip seen in the PMI, Steel said, and the combined survey results are evidence that employment growth has remained strong into the heart of the third quarter of the year.