New Zealand's services sector showed expansion for a second consecutive month in July but without any sign of acceleration, weighed down by contraction in employment and supplier deliveries.
The BNZ BusinessNZ Performance of Services Index (PSI) for July was 50.6 in seasonally adjusted terms, above the 50 mark that indicates expansion but slightly down from 50.9 in June.
New orders/business was the strongest sub-index at 52.6, up from 53.3 in June, while employment remained in contraction at 48.5, down marginally from June's 48.8 reading.
The report said that there is little chance of the unemployment rate falling until meaningful services job growth returns, given the size of New Zealand's services sector.
The supplier deliveries sub-index fell into contraction with a reading of 48.5, down from 51.2 in June.
"The positive take is that this represents progress, with the past two months having shown better readings than for most of the past three years. Moreover, the activity/sales index rose above 50 for the first time in six months," said BNZ Senior Economist, Doug Steel.
The BusinessNZ Performance of Manufacturing Index (PMI) report on Friday showed that the manufacturing sector expanded with a reading of 54.3, below June's 60.1 reading but above the survey's long-term average of 52.5.
BusinessNZ Performance of Composite Index, which combines the PMI and PSI, was at 51.1 in the gross domestic product-weighted Index and 52.6 in the free-weighted index, compared to 51.6 and 53.8 in June, respectively.
