Economic data from the services sector shows that it is growing, despite mixed results in the past two months, says a bank economist.
The BNZ- Business NZ Performance of Service Index (PSI) for March was 53.9, the second strongest March result since the survey started in 2007.
A number above 50 means the sector is expanding.
The result is 1.9 points lower than February, but higher than January, and contributes to a first quarter result of 54.4.
Hospitality, distribution and retail sectors are still struggling this year, while communications, property and business, and health and community industries show the best performance
BNZ senior economist Craig Ebert says that despite the mixed results, the sector is growing, in line with indications from other key economic data.
"Compared to the end of last year, when things were perceived to be starting to stall, and there was a lot of concern globally that things were beginning to collapse around Europe, the domestic indices have really got back into a solid growth mode," says Mr Ebert.
But the communications sector is baffling because its strong performance on the PSI contradicts its performance in GDP data, which showed that sector as shrinking.
Four of the five sub-indices on the PSI show expansion, led by new orders at 60 points, while sales fell to its lowest point since December.
Mr Ebert says one surprise is the burgeoning communications sector which is the strongest industry on the index, in contrast with GDP figures which show it shrinking.
Unadjusted activity expanded in three of the four regions in March with Canterbury/Westland strongest, while weaker sales dragged down Otago/Southland.
Of the sectors, property and business services and health and community rose sharply but the wholesale trade and accommodation and restaurant sectors contracted.