Katherine Rich: BusinessNZ CEO on the BNZ Business New Zealand Performance of Services Index showing growth in June

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The Mike Hosking Breakfast 2 min 2 speakers 3 chapters transcribed 2 months ago
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What does the June BNZ-BusinessNZ Performance of Services Index reveal about services growth?

Mike Hosking 0:00
So yesterday it was manufacturing, today we've got the services sector back into expansion mode. We're up from 48 in May to a bit over 50 last month. New orders, the strongest category at 53. Catherine Rich is Business New Zealand boss and is back with us. Catherine, very good morning to you. Good morning.

Which PSI subcategories drove the uptick—are new orders leading the recovery?

Mike Hosking 0:14
Touch of relief here?
Katherine Rich 0:17
It is good news. It's a flicker into life, but it really shows the economy's on the path to recovery. And we're on the right track in terms of the direction.
Mike Hosking 0:26
Do you place a lot of weight on the new orders side of the equation? That came into manufacturing yesterday. Strongest subcategory, new orders. New orders is the future, isn't it?
Katherine Rich 0:35
Yes, it is. And what we like about the two surveys, the PMI and the PSI, is that they're one of the earliest indicators of how the economy is going. So new orders is a really good indicator. Businesses are saying that customers are starting to part with some of their money. Still some fragility, though, when it comes to some of the discretionary spends for consumers and retail, hospitality, cash bays, etc., But the result's really positive. And so I think it's just another part of, you know, shows we're on the path to recovery.
Mike Hosking 1:09
Manufacturing looks really solid. Services, not quite as much. Is there more in services where this came from, do you think? What's your vibe?
Katherine Rich 1:17
Well, the services result is important because, of course, it's 70% of our economy. But the manufacturing figure, which was the highest in five years, showed that for manufacturers it was one of the strongest results they've had. So that was positive. It adds up to a pretty positive outlook for the economy. But of course, things change dramatically. A lot of what New Zealand's facing, we can't influence straight to Hormuz, etc. But with what we've got in the last month, very, very encouraging.

How are businesses reporting customer spending and discretionary retail trends?

Mike Hosking 1:52
Will take it. Nice to get your insight. Catherine Rich, who's the Business New Zealand CEO.

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