Growth put at 4 per cent
The services sector is in good health, along with manufacturing, pointing to overall economic growth of about 4 per cent, according to an industry survey.
Led by a storming retail trade sector, the BNZ-Business NZ Performance of Services Index was 57.5 points in December, up 1.1 points from November. The survey includes the retail trade, wholesalers, property and business services, transport and storage and health services.
A figure above 50 indicates the sector is expanding, and below that it is contracting.
The December figure was the third highest for the year and compares with the average of 55.8 points for the year.
The retail sector was the standout performer in December at 74.5 points.
While the sub-sector figures can move up and down month by month, there was "certainly a strong pulse coming through retailing," BNZ senior economist Craig Ebert said. The figures are not seasonally adjusted and December was typically a huge month for Christmas spending, but the number was far higher than the previous two Decembers, both about 61 points.
The PSI at 57.5 points was slightly ahead of the Performance of Manufacturing Index, PMI at 56.4 points, out last week.
BNZ said the results were positive, but not quite as buoyant as the broader consumer and business surveys suggest, at up to 6 per cent growth this year. Instead, the PSI and PMI combined suggested growth maintaining a pace of about 4 per cent. That was more in line with the recent Quarterly Survey of Business Opinion from the NZIER than the latest ANZ business survey.
Overall, the five main services sector sub-indexes were in expansion in December, continuing an eight-month run.
New orders remained in top spot at 62.4 points. New orders have been above 60 points for eight of the last nine surveys. Anything above 60 is seen as a "rapid rate of knots" for expansion, Ebert said.