New Zealand’s services sector experienced further expansion during December to round out a solid year of activity, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
 
The PSI for December was 58.4.  This was 0.3 points up from November, and the highest result for 2016 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).
 
BusinessNZ chief executive Kirk Hope said that 2016 ended off on a high note, with both production/sales (63.5) and new orders/business (60.9) remaining about the 60-point mark. 

“The average activity result for 2016 was 56.6.  While this was slightly down on the 57.8 recorded for 2015, it was still the third highest average yearly result since the survey began.”
 
BNZ Senior Economist Craig Ebert said that “unlike its PMI cousin, the PSI’s new orders/business index remained clearly above normal.  This heralds sustained strong expansion in sales activity, which was already pumping in December “.
 
View PSI Time Series Data

Services Landscape
 
The PSI
New Zealand’s Performance of Services Index (PSI) maintained a perky pace in December, with an index reading of 58.4.
Read more  → 
 
QSBO Services
That the services sector continues to barrel along rather well was also in evident in last week’s Quarterly Survey of Business Opinion (QSBO).
Read more  → 
 
Retail
One of the question marks we have around the services sector is the performance of the retail sector.  We say this with December’s electronic card transactions having failed to bounce back from their November dip, capping our expectations around Q4 retail volume growth.
Read more  → 
 
Employment
One of the factors supporting consumer spending, of course, is the labour market.  Today’s PSI still has good news re the latter.
Read more  → 
 
View full BNZ Services Landscape 

Auckland Chamber launches confidential service to ensure employers meet New Zealand wage regulations.Increasing numbers of migrants and younger workers being taken advantage of by employers; notes Auckland Chamber head Michael …

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New Zealand cloud software start-up Datagate Innovation Limited has appointed Arron Patterson – Dell EMC Chief Technology Officer for Asia Pacific and Japan, and start-up investor/mentor – as a Non-Executive Director.
 
For customers including a network of Spark resellers and one of New Zealand’s largest IT services companies, Datagate’s cloud billing solution provides online billing, reporting and customer self-service for usage-based services.
 
Arron Patterson joins BankLink founder Malcolm McDonald on the Datagate board. Mr Patterson has also invested in Datagate through investment group Flying Kiwi Angels. In his role as investor, advisor and mentor for Flying Kiwi Angels Patterson routinely sees presentations from six different start-ups and start-up ideas each week. He says Datagate ‘stood out from the pack.’
 
“I was impressed by CEO Mark Loveys’ track record of creating shareholder value and with the quality of the team around him,” Arron Patterson says.
 
“Datagate’s product is also pretty mature and it has happy customers. The foundations are in place for the company to grow in scale. Part of my regional CTO role is to evaluate the cloud IT service provider market. One of the persistent challenges for these organisations is the need to carve up a service stream and give it to multiple metered customers. Datagate’s value is that it can bill, rate and present virtually any service that is subscription or usage-based. Metered billing continues to be an issue for managed service providers the world over, which is why Datagate has global growth potential. This is a start-up that has successfully solved a difficult issue for many utility and telco customers. Cloud IT service providers are the next logical target.”
 
CEO Mark Loveys says Arron Patterson’s expertise in managed service provisioning, and his global business connections, are valuable for both customer acquisition and strategic planning. 
 
“Arron lives and breathes the large IT service provider market, which is one of Datagate’s biggest market opportunities,” he says.
 
“These are highly strategic customers because they generate new ‘white label’ opportunities for Datagate within their own reseller and customer communities. This grows annualised revenue. It’s a dynamic that has seen Datagate almost triple customer numbers and contracted annualised revenue in the last twelve months,” Mark Loveys says.
 
Formerly a wholly-owned division of NZAX-listed Enprise Group (ENS), in 2015 Datagate was established as a joint venture between Enprise Group and new investors, including the Ice Angels, VIF, Flying Kiwi Angels and Datagate management. First round seed funding of $1.46 million was raised and a separate board established, BankLink founder Malcolm McDonald joined the board as a director and Enprise CEO and co-founder Mark Loveys was appointed CEO.

Closing Westfield rail station will do nothing to improve travel for South Auckland workers and residents and do nothing significant for the rest of Auckland either, says Auckland Chamber of Commerce head Michael Barnett. Auckland T…

Activity in New Zealand’s manufacturing sector saw December expansion at the same level as November, according to the BNZ – BusinessNZ Performance of Manufacturing Index (PMI).
 
The seasonally adjusted PMI for December was 54.5 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining).  This was the same as November, and the joint lowest expansion level since October 2015.  Overall, the sector remains solidly in expansion in almost all months since October 2012.

BusinessNZ’s executive director for manufacturing Catherine Beard said that although December’s result did not show improvement from November, the overall result for 2016 was encouraging.
 
“Activity in the manufacturing sector over 2016 averaged out at 56.0.  This was up from 54.2 in 2015, but interestingly the same result as both 2014 and 2013.  Overall, this shows how consistent and positive activity has been for the sector over the last few years”.  
 
“In addition, the proportion of positive comments stood at 70% for December, with seasonal factors (particularly Xmas) having a strong influence”.

BNZ Senior Economist, Craig Ebert, said “the December result caps off a positive year for the manufacturing sector.  Indeed, since the survey started in 2002, last year’s average has only been surpassed by 2004’s 57.5”.

View PMI Time Series Data

Manufacturing Snapshot
Happy Last Year
New Zealand’s Performance of Manufacturing Index (PMI) finished 2016 at 54.5, so no change between November and December. The final two months weren’t quite as strong as the rest of the year (not due to earthquakes, it would seem, as, regionally, Central NZ has shown the largest annual increase).
Read more  →
 
Some Warnings
The PMI and QSBO both suggest manufacturers enjoyed reasonable growth, particular in production, in the final quarter of 2016. But some details raise a warning.
Read more  →
 
Happy New Year
A reason not to be too alarmed by softer new order indicators is manufacturers’ overall upbeat outlook. Manufacturers in the QSBO are more confident.
Read more  →
 
Supply and Demand
Also above norms are indicators of manufacturers’ resource tightness. For example, manufacturers’ difficulty in finding appropriate staff has become even more acute while capacity utilisation, at 92.3%, is above its long term average, of 90.4%.
Read more  →

View full BNZ Manufacturing Snapshot

Spark has opened a new store in the BNZ Centre on Cashel Street and plans to celebrate with Cantabrians this Friday 20thJanuary, 11am–1pm.The Spark ‘Automatic Thanks Machine’ (ATM) is making its way to Christchurch for …

Retail spending using electronic cards reached the highest-ever monthly figure in December 2016, Statistics New Zealand said today.

Total retail spending using electronic cards was $6.5 billion in December 2016, up $355 million (5.8 percent) from December 2015. The largest industry increase came from hospitality, up $126 million (13.4 percent).

“This is the first month card spending in hospitality exceeded $1 billion,” business indicators manager Tehseen Islam said. “The higher hospitality spending coincides with a period of rising international tourism and residents enjoying Christmas and New Year holiday breaks.”

However, when adjusted for seasonal effects, retail spending fell 0.1 percent in December 2016. This follows a 0.1 percent fall in November 2016.

Seasonally adjusted card spending rose in three of the six retail industries. The largest movements in December 2016 were:
 

• fuel, up $26 million (4.4 percent)
• durables, down $17 million (1.4 percent).

Core retail spending (which excludes the vehicle-related industries) fell 0.8 percent in December 2016, after a 0.5 percent fall in November 2016.

The total value of electronic card spending, including the two non-retail industries (services, and other non-retail) was unchanged in December 2016. This follows a 0.3 percent fall in November 2016.

Trends for the total, retail, and core retail series have generally been rising since these series began in October 2002, but have been easing in recent months.

Values are only available at the national level, and are not adjusted for price changes.

New Zealand small businesses finished 2016 on an upbeat note, with confidence at its highest levels in almost two years, according to ANZ’s quarterly Business Micro Scope survey of small firms.A net 20% of respondents – up from 17%…

The Reserve Bank has appointed Klarissa Plimmer as Chief Information Officer and Patrick Hoerler as Head of Risk Assessment and Assurance.
 
As Chief Information Officer, Klarissa Plimmer is responsible for the Bank’s information management and technology. Ms Plimmer was previously the Director ICT Solution Delivery at the New Zealand Defence Force, and has worked in a number of ICT leadership roles at the BNZ for 13 years.
 
Patrick Hoerler heads the Bank’s Risk Assessment and Assurance unit, which is responsible for ensuring that financial, operational, and reputational risks faced by the Bank are identified, monitored and managed in line with best practice. The unit includes the Bank’s internal audit function and legal services.
 
Before joining the Bank Mr Hoerler was the Risk Assurance Officer for Mercury (formerly Mighty River Power and Mercury Energy) and was previously their treasurer. Mr Hoerler has a background in international banking, working with Credit Suisse and Zurich Kantonalbank in the US and Asia before migrating to New Zealand to work as treasurer for ENZA and in banking with HSBC.