Catherine Beard: BusinessNZ Advocacy Director on the services sector continuing to contract in April

The services sector continues to contract. 

The latest Services Index rose 2.7 points to 48.9 – with anything below 50 signalling contraction. 

New orders was the only category in expansion, sitting at 51.2, while employment remained negative for the 29th consecutive month.  

BusinessNZ Advocacy Director Catherine Beard told Mike Hosking the figures are the result of the fuel situation due to the conflict in the Middle East.  

It’s a shame, she says, as we started the year in quite positive territory.  

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Episode Transcript

Speaker 1 (00:00):
Interesting read from our services sector. I mean, can you
believe those stories? I mean, of course you can believe
those stories are true. Interesting read from our services sector.
It's actually up two point seven points to forty eight
point nine. Trouble the forty eight point nine. Of course,
it's in contraction because you need fifty to expand. New orders, though,
are expanding fifty one point two. Jobs are an issue though.
Catherine Bed's, Director of Advocacy for All Business New Zealand,
is back with us. Catherine, morning to you, good morning.

(00:22):
The glass half full. Pace of contraction is slowing. Is
there hope in that?

Speaker 2 (00:28):
Yes, well, look there's always hope and we'll take any
any positives out of it. But yes, you're right, it
is dull in contraction, and of course with services it's
a very big part of the New Zealand economy. So
the other good bit of news in that though, was
that the new orders were just an expansion at fifty one,

(00:49):
and sometimes that can mean that next month data is
going to be better.

Speaker 1 (00:53):
New orders of the future.

Speaker 2 (00:55):
They are, they are, so I always look at the
new orders figure. But of course you know this is
all this is all really the fuel situation coming out
of the trouble in the Middle East with Iran, so
it's really impacting both manufacturing and services, which is a
bit of a shame really because we started the year

(01:16):
in quite positive territory.

Speaker 1 (01:18):
But when you say manufacturing, the manufacturing numbers which came out, yes,
I get it, but the job side of the manufacturing
jobs are still I mean, I don't know what you
want to bullish robust, whatever. They're still firing. Why they're
hiring and manufacturing, but not in services. What's going on there.

Speaker 2 (01:32):
I think the manufacturing reflects that it was getting more
into expansion faster. So the data from the manufacturing side
was looking stronger towards the end of last year and
at the start of this year, so I think that's
probably reflecting the hiring going on there. The other thing,
of course, is your bigger firms are more robust than

(01:53):
your smaller firms, so you might have kind of the
bigger firms actually in a better situation and hiring more
than the smize.

Speaker 1 (02:01):
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