16 Oct 2017

Services sector slows post-election

3:39 pm on 16 October 2017

Activity in the services sector has cooled with political uncertainty after the election weighing on businesses.

Mighty River Power hydro dam

A Mercury hydro dam Photo: MIGHTY RIVER POWER

The BNZ - Business New Zealand Performance of Services Index fell 1.2 points in September to 56.

A reading over 50 indicates expansion, and despite the fall, it remains well above the long term average of 54.4.

The decline was driven by a drop in sales and new orders.

A BNZ senior economist, Doug Steel, said a quarter of those surveyed pointed to the election having a major negative effect on their businesses.

"There is a more genuine slowing in the sales component that might have been attributed to the uncertainty with respect to the election," he said.

"You're seeing consumer confidence come off and some other indicators of sales easing in the month."

There was enough momentum to keep businesses employing people, Mr Steel said.

A companion survey of the manufacturing sector last week showed a slight fall in activity in September.