Though the month of June saw the service sector contract more quickly as compared to May, the latest Performance of Services Index (PSI) has revealed that the reading for new orders crept into positive territory last month.

The month of June witnessed the PSI, produced by BNZ Capital and Business NZ, plunging to a reading of 45, down 1.2 points from May. If a PSI reading goes above 50, it indicates the service sector is generally expanding, and if it is below, 50 then it points that it is declining.

A tip into positive territory for the first time since March was visible in new orders/business among the five diffusion indexes which make up the PSI, while for only the third time in 10 months, with a reading of 50.8.

No change was noticed in activity/sales from May at 43.9 points; however, employment plunged to 43.6 points after improving the month before. Since the survey started, both stocks/inventories, at 41, and deliveries, at 42.2, dropped to their lowest levels.

"The required boost in new business/orders for an overall improvement in the service sector showed some encouraging signs for June," said Business NZ chief executive Phil O'Reilly.

Results came out to be almost negative for the various industries of the service sector, with the lowest recorded by transport and storage (35.3), retail trade (44.3) and wholesale trade (45.9).

The strongest amount of activity was recorded in Health and community services (48.6), and accommodation, cafes and restaurants (48.4), which were up from May.

The average PSI value was 45.2 for the first half of 2009, close to the June result; while for 2008, the average PSI value was 49.1 and for 2007 it was 58.1.