The service sector of New Zealand rebounded to an expansion phase in January, according to a recent survey released by BusinessNZ. The survey recorded a Performance of Services Index (PSI) score of 52.1 for the sector.
This is an increase from the 48.8 score recorded in December, pushing the number back above the critical 50-point threshold, which differentiates between expansion and contraction in the sector.
The survey showed growth in specific areas such as sales (53.0), new orders (51.8), and stocks (53.5), while employment rates (48.1) and supplier deliveries (48.7) were observed to be contracting.
Senior Economist at BNZ, Doug Steel, commented on the figures, stating that the combined activity indicators of the Production Manufacturing Index (PMI) and PSI suggest that the annual GDP growth will shortly become positive. He views this as encouraging news for an economy that has been struggling. However, he cautioned that there is still a long journey ahead to achieve growth rates capable of preventing the generation of surplus capacity in the economy.
