By James Glynn
SYDNEY--New Zealand's services sector is suffering through its weakest period since the start of 2022 suggesting the country's recession will extend for some time yet.
The BNZ - BusinessNZ Performance of Services Index for April was 47.1, down 0.1 points from March, the lowest level of activity for the sector since January 2022.
When the PSI is combined with last week's performance of manufacturing index data, the economic picture is grim, said BNZ's Senior Economist Doug Steel.
"Combining today's weak PSI with last week's PMI yields a composite reading that would be consistent with GDP tracking below year earlier levels into the middle of this year. That is what we expect and, if anything, the combined index suggests some downside risk to our forecasts," Steel said.
Although activity and sales improved slightly in April, new orders continued to fall backwards, while employment dropped to its lowest result since February 2022, according to the data. Supplier deliveries also dropped to its lowest point since November 2022.
The proportion of negative comments from businesses continued to march upwards over April to 66.3%, compared with 63.0% in March and 57.3% in February.
A noticeable proportion of respondents noted the current difficult economic times, along with lingering inflationary issues, the report showed.
New Zealand's economy has been in recession for some time with little end in sight given that the Reserve Bank of New Zealand says it remains alert to the problem of stubborn inflation pressures.
Write to James Glynn at james.glynn@wsj.com
(END) Dow Jones Newswires
05-12-24 1957ET
