Activity in the services sector is close to stalling.
The BNZ-Business New Zealand Performance of Services Index fell for the second consecutive month, to 50.6 last month, due to a fall in sales and new orders, while employment contracted.
A reading above 50 indicates the sector is generally expanding. It's now at its lowest level since July last year.
BNZ head of research Stephen Toplis says the economy is struggling and companies are deferring their investment and employment decisions for the moment.
He says the increased unease is due to uncertainty associated with Europe and Australia, the postponement of a pick-up in the construction industry, the hangover from the Rugby World Cup and the forthcoming general election.
