RTTNews - Monday, a report released by the Business New Zealand said the services sector continued to contract in April, with the Performance of Service Index or PSI dropping to 43.7 from 47.1 in March. The index was also down 5.2 points from last April. The service sector has remained in contraction now for 13 consecutive months.
A reading above 50 indicates an expansion, while a reading below 50 signals a contraction.
In April, the activity index dropped further to 40.9 from 47.8 in March, and the employment index fell to 42.4 from 44.8. New orders slipped back into contraction, after showing expansion in March, with the index moving down to 47.6 from 51.4 in the preceding month. Moreover, the inventories index slipped to 42.6 from 45.4 and the deliveries index deteriorated to 44.9 from 51.4.
Nervousness in the market is still holding many back from spending, but there is still a significant group that are finding positive trading conditions over recent months, with many citing new contracts and sales keeping their business busy, the Business New Zealand said.
The report indicated that the troubled tourism sector was having a major influence on the service sector's performance. At the same time, other industries were also showing weakness. In April, the wholesale trade sector dropped to its lowest levels ever, while retail trade as also accommodations, cafés and restaurants, although remaining in contraction, showed modest signs of recovery. On the other hand, health and community services showed an expansion, and was the only sector to do so in the month.
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