WELLINGTON, May 18 (Xinhua) -- New Zealand's services sector contracted in April, though at a slower pace than in March, with fuel prices and weak discretionary spending weighing on activity, a business survey showed on Monday.
The Bank of New Zealand (BNZ)-BusinessNZ Performance of Services Index rose to 48.9 in April from 46.2 in March, but remained below the 50-point mark that separates expansion from contraction.
Katherine Rich, chief executive of BusinessNZ, the country's main business industry body, said in a statement that more than two-thirds of respondents reported negative influences on their businesses over the month, with many citing fuel prices.
"With the continuing conflict affecting shipping through the Strait of Hormuz, it is difficult to foresee a quick return to expansion in the sector," Rich was quoted as saying.
The survey showed that the new orders sub-index returned to expansion at 51.2, but the other four sub-indexes all remained in contraction, with the weakest being supplier deliveries at 46.6.
BusinessNZ said micro-businesses with one to 10 staff were under the most pressure in April, with their sub-index at 44.4, while medium-large firms with 51 to 100 employees recorded the strongest reading at 55.5.
BNZ head of research Stephen Toplis said the April improvement could either signal resilience to the Middle East conflict or, more likely, show the economy was still "struggling to get its head above water."
Accommodation, cafes and restaurant activity dropped sharply in April, as households cut back first on discretionary spending, Toplis said. ■
