Region's service sector down
The Southland and Otago service sector nose-dived last month, while other regions in the country saw strong expansion.
The BNZ-Business NZ Performance of Services Index for May slipped back to 46.5 points from a strong April 62.6 result, which had showed signs of expansion.
An index above 50 indicates the sector is expanding and under 50 that it is contracting.
In April, Otago Southland Employers' Association chief executive John Scandrett advised people to view that month's buoyant PSI in a conservative light and predicted it could be weakened at the expense of developing strength of the Christchurch rebuild.
However, he said it was pleasing there were also some positive signals in the construction sector in Southland and Otago in May, with some regional businesses involved in the Christchurch rebuild.
"This does not mean that all regional construction activities are firing as expected, and there are survey comments that bemoan a sluggishness in our regional building performance levels," Scandrett said.
Earlier this week a stagnant Performance of Manufacturing Index of 50.0 points for the region caused concern because it reflected a growing number of manufacturing jobs moving into Christchurch.
The Southland Times reported a "Southland supply plan" organised by Venture Southland was being developed to help with the rebuild but also to prevent the drain of skilled people from the south.
Scandrett said the May PSI continued to show negativity in some parts of the tourist sector.
The slump was expected during the shoulder season, between summer and winter.
With winter kicking-in, he expected new tourist flows would soon be evident.
"The Australians will wait until there is snow and then they will start coming," he said.
The sector had seen a slight increase since last weekend when the skifields opened in Queenstown. However, the tourist industry was still suffering from the aftermath of the Christchurch earthquakes.
There had been a downturn in visitors, particularly from Asian tourist markets.
"They have refocused on the United States, Europe and the United Kingdom because of the earthquakes and the currency situation suited them better in those regions," he said.
The overall national PSI for May was 56.8, the second-highest value recorded for that month since the survey began in April 2007.
BusinessNZ chief executive Phil O'Reilly said signs of new business and orders assisted the increase.
BNZ senior economist Craig Ebert said the New Zealand PSI was fast becoming a leading light. It had overtaken the United States' PSI and was far stronger than the Eurozone's. "Who would have thought it would be far stronger than Australia's? It is also fast catching up with the always sturdy, but recently slowed, Chinese PSI," he said.
Scandrett predicted the June PSI would be similar or a slightly improved outcome than the May result.
- © Fairfax NZ News