New Zealand service sector joins manufacturing in resurgence

New Zealand's service sector expanded last month, according to the latest performance of services index (PSI), reinforcing signs of a slow economic momentum. The PSI reading for February was 55.5, up 1.7 points from January and 4.4 points from December, according to the BNZ- Business New Zealand PSI out Monday. The result for last month was also the highest February reading since 2007, said a statement from Business New Zealand. A PSI reading above 50 indicates expansion, and below 50 a decline. Business New Zealand Chief Executive Phil O'Reilly said the February PSI and performance of manufacturing index (PMI) provided some encouraging signs for the overall economy. "The improvement in the PSI comes off the back of further upwards momentum in both activity-sales and new orders-business. Also, when taking into account the January result, the first two months of 2012 have showed more life than we have experienced for some time," said O'Reilly in the statement. The proportion of positive comments has risen from less than half in January to a strong 56.1 percent in February, he said. BNZ senior economist Craig Ebert said in the statement that February's PSI and PMI combined pointed to probably quickening pace of economic recovery. The BNZ-Business New Zealand Performance of Composite Index or PCI, combining the PMI and PSI, for February showed the two options for measuring the PCI significantly improving from the previous month. The GDP-Weighted Index rose 2.2 points from January to 55.8, while the Free-Weighted Index rose 4.8 points to 57.2 both the highest monthly values since March 2010. All five PSI sub-indices showed expansion in February, led by new orders-business at 60.5, followed by activity-sales at 58.1, employment (51.8), supplier deliveries (52.3) and stocks- inventories (51.2). New Zealand manufacturing activity last month was the highest in almost two years, according to the PMI reading issued Thursday.