US Markets
New Zealand's Services Sector Returns to Growth After Six-Month Contraction
New Zealand's services sector expanded in June after six months of contraction, as supplier deliveries and new orders returned to growth.The BusinessNZ Performance of Services Index rose to 50.6 in June from 48 in May, just above the 50-point mark which separates expansion and contraction.Supplier deliveries and new orders were the only two sub-indices with readings above 50, at 51.2 and 53, respectively, while sales, employment, and inventories remained below 50 at 49.3, 48.8, and 49.9, respectively."A return to sustained growth depends on consumer confidence rebuilding, and that is unlikely while cost-of-living pressures remain this prominent," said BusinessNZ's CEO, Katherine Rich.Rich said that the recovery is tentative, unlike the strong bounce seen in the manufacturing sector in June, as households are still focusing their spending on fuel, food, and other essentials.BusinessNZ's report noted that the employment indicator has now been "worryingly" in contraction for 31 consecutive months, which is a substantial headwind to employment growth as services employ many more people than manufacturers.BusinessNZ's head of research, Stephen Toplis, said that while the June result is "hardly a spectacular number," it confirms that the trend in growth before the oil shock is resuming.The BusinessNZ Performance of Composite Index, combining both manufacturing and services, had a "solid lift" in June, rising to 51.2 from 48.4 in May on a Gross Domestic Product-weighted basis and increased to 53.6 from 49.9 on a free-weighted basis.
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