17 Oct 2011

Services sector grows slower in September

6:53 pm on 17 October 2011

The pace of growth in services activity has slowed due to weaker sales.

The BNZ-Business New Zealand Performance of Services Index stood at 53.3 in September, down slightly from the previous month, with stronger employment offsetting weaker sales.

A reading above 50 indicates the sector is generally expanding.

BNZ economist Doug Steel says the results are mixed.

He says, although sales have declined, new orders remain strong and that is encouraging for the continuing recovery of the economy.

Mr Steel says, given the diversity of the services sector, it is not surprising to see volatility in the detail.

He blames the decline in sales on events like the Rugby World Cup, the ongoing destruction from the Canterbury earthquake and events in the global economy.

He says slowing sales could also be to do with a change in the timing of school holidays, which were pushed back to coincide with the final stages of the Rugby World Cup.