21 Sep 2011

Orders for services sector strong

5:35 am on 21 September 2011

The services sector, buoyed by a strong showing of new orders, has shrugged off the latest turmoil on international equity markets and fears of a global slowdown.

The BNZ Business New Zealand Performance of Services Index showed the pace of activity slowed slightly, to 53.9 in August. A reading above 50 indicates the sector is generally expanding.

New business and sales continue to expand, offsetting a contraction in employment and stocks.

BNZ senior economist Craig Ebert says Europe's debt troubles, and slowing growth in the US and Australia, may yet tax the economy more, but it isn't showing through yet.

"The orders coming into businesses down the track (are) getting probably what you'd describe as strong, rather than just hanging in there," he says, while activity is largely consistent with GDP growth.

On a regional basis, Mr Ebert says Auckland continues to perform well.

Last week, a similar index showed manufacturing activity remained resilient.