Latest / The SME Stream / Chris Small: ABC Business Sales CEO on the service sector's worst performance since May

Transcript

Chris Small: ABC Business Sales CEO on the service sector's worst performance since May · The SME Stream

• 0:00
  Speaker 1: Got some sober reading for the services sector. New B
• 0:02
  Speaker 1: and Z Business New Zealand data shows the services index
• 0:05
  Speaker 1: has slipped to forty six point nine. That's for November.
• 0:08
  Speaker 1: Anything below fifty means it's contracting. This is at its
• 0:11
  Speaker 1: worst level in six months. And Chris Small is ABC
• 0:14
  Speaker 1: Business our CEO and with us morning, Chris Well are
• 0:17
  Speaker 1: here there, you go, very well, this is a bit
• 0:18
  Speaker 1: of a surprise. It is a surprise to you.
• 0:21
  Speaker 2: Yeah, it really is a surprise. I thought that you know,
• 0:24
  Speaker 2: the worst, the worst of it been seen in winter
• 0:26
  Speaker 2: and order new data that we've seen suggested that winter
• 0:29
  Speaker 2: was our low point and then this sort of just
• 0:31
  Speaker 2: banged us yesterday all the day before. I think it
• 0:33
  Speaker 2: was so slightly surprising. But there are I think one
• 0:36
  Speaker 2: thing that's not covered here is the regional landscape in
• 0:39
  Speaker 2: New Zealand, and I think if you looked at the
• 0:41
  Speaker 2: South Island numbers in isolation, you'd probably see they're going
• 0:45
  Speaker 2: quite well. And then if you look at Auckland and Wellington,
• 0:47
  Speaker 2: which sort of other service hubs, they aren't going so well.
• 0:50
  Speaker 2: And obviously the South Island's driven by that. You know,
• 0:52
  Speaker 2: it's the primary negre sector, which is which is really
• 0:55
  Speaker 2: flying and helping that part of New Zealand.
• 0:57
  Speaker 1: So the PSI for a comedy cafes and restaurants and
• 1:01
  Speaker 1: looks if you look at it, okay at fifty eight
• 1:03
  Speaker 1: point eight, but actually that's still below the average of
• 1:05
  Speaker 1: sixty one point out. Now, what do you put that
• 1:07
  Speaker 1: down to. Is that simply we don't have the discretionary
• 1:10
  Speaker 1: cash we used to have.
• 1:12
  Speaker 2: Look, that's certainly what it's suggesting. But you know, we've
• 1:14
  Speaker 2: got a number of clients in that sector, and a
• 1:17
  Speaker 2: number of them are actually reporting really strong, really strong
• 1:21
  Speaker 2: run into Christmases. So I think in that sector in particular,
• 1:24
  Speaker 2: and you probably not yourself together when you're walking down pints, right,
• 1:27
  Speaker 2: there's there's some operators who are really strong and going well,
• 1:31
  Speaker 2: and then there's some that are answer there's real winners
• 1:33
  Speaker 2: and losers in that sector. Probably not too many in
• 1:35
  Speaker 2: the middle. So there's certainly many operators are going really well,
• 1:38
  Speaker 2: but if you're not producing something that customers want, you
• 1:41
  Speaker 2: really are struggling. Soeraps more of a winners and losers
• 1:44
  Speaker 2: rather than a consistent everyone's down. Yeah.
• 1:46
  Speaker 1: Now, now the retail number strongest in eight years down
• 1:50
  Speaker 1: to Black Friday.
• 1:52
  Speaker 2: Look a little bit of that, but also think those
• 1:54
  Speaker 2: lower interest rates are starting to kick in. And I
• 1:56
  Speaker 2: think when you think about your own spending, as soon
• 1:59
  Speaker 2: as you start seeing a little bit of extra money
• 2:01
  Speaker 2: in your bank account each week, you're probably going to
• 2:03
  Speaker 2: hit the shops first, and then you might hit your
• 2:05
  Speaker 2: services second. I think that's a bit of a leading
• 2:07
  Speaker 2: indicator that actually, you know what, we have hit the
• 2:10
  Speaker 2: bottom and things are slowly turned around, and services is
• 2:12
  Speaker 2: just going to be the lagging factor.
• 2:14
  Speaker 1: I think does I mean some people have looked at
• 2:16
  Speaker 1: these numbers I've seen already and they've gone, jees, I
• 2:18
  Speaker 1: don't know what this is for the outlook for economic
• 2:21
  Speaker 1: recovery next year? Are you doing that as well?
• 2:24
  Speaker 2: Look when you look at there's one number that stands
• 2:26
  Speaker 2: out there. So the strongest number within that report was
• 2:29
  Speaker 2: the new order number. So that's the most forward looking
• 2:32
  Speaker 2: indicator you've got, and that's the heart. It's at forty
• 2:35
  Speaker 2: nine percent, so it's still it's only just below fifty, which,
• 2:39
  Speaker 2: as you rightly said, is the sort of midpoint and
• 2:41
  Speaker 2: anything above that expansion. So I think with all our
• 2:45
  Speaker 2: customs that we talk to, whether it be childcare, gyms, hospitality,
• 2:49
  Speaker 2: they're all they're all thinking that they've hit the worst
• 2:51
  Speaker 2: of it and things are starting to be on the
• 2:53
  Speaker 2: mpre of in twenty twenty six is going to be
• 2:55
  Speaker 2: a far better year. So I think if you really
• 2:58
  Speaker 2: read them between the numbers, most forward looking indicator is
• 3:01
  Speaker 2: the strongest and regional wise used to be no walk
• 3:04
  Speaker 2: from them, warning from the struggling, but they will come
• 3:06
  Speaker 2: back and they'll follow the lead from out from the south,
• 3:08
  Speaker 2: fall into it, sort of benefiting from the primary and
• 3:11
  Speaker 2: egg receptors the way we look at it.
• 3:12
  Speaker 1: Oh, that's fantastic news, Chris. You look after yourself. It's
• 3:14
  Speaker 1: always good to talk to you. Chris Small, ABC Business
• 3:16
  Speaker 1: Sales CEO. For more from the Mic Asking Breakfast, listen
• 3:21
  Speaker 1: live to news talks that'd be from six am weekdays,
• 3:24
  Speaker 1: or follow the podcast on iHeartRadio