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Chris Small: ABC Business Sales CEO on the service sector's worst performance since May · Best of Business

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  Speaker 1: You're listening to a podcast from news Talk zed be
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  Speaker 2: Got some sober reading for the services sector New b
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  Speaker 2: and Z Business New Zealand data shows the services index
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  Speaker 2: has slipped to forty six point nine. That's for November.
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  Speaker 2: Anything below fifty means it's contracting. This is at its
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  Speaker 2: worst level in six months. And Chris Small is ABC
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  Speaker 2: Business our CEO and with us morning, Chris.
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  Speaker 3: Well, here there you go, very.
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  Speaker 2: Well, this is a bit of a surprise. It is
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  Speaker 2: a surprise to you.
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  Speaker 3: Yeah, it really is a surprise. I thought that, you know,
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  Speaker 3: the worst of it been seen in winter and order
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  Speaker 3: new data that we've seen suggested that winter was our
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  Speaker 3: low point and then this sort of just banned us
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  Speaker 3: yesterday all the day before. I think it was so
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  Speaker 3: slightly surprising. But there are I think one thing that's
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  Speaker 3: not covered here is the regional landscape of New Zealand,
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  Speaker 3: and I think if you looked at the South Island
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  Speaker 3: numbers in isolation, you probably see there going quite well.
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  Speaker 3: And then if you look at Auckland and Wellington, which
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  Speaker 3: sort of other service hubs, they aren't going so well.
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  Speaker 3: And obviously the south ID is driven by that. You know,
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  Speaker 3: the primary and egre sector which is really flying and
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  Speaker 3: helping that part in is Yelland so.
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  Speaker 2: The PSI for accommodation cafes and restaurants looks if you
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  Speaker 2: look at it, okay at fifty eight point eight, but
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  Speaker 2: actually that's still below the average of sixty one point eight.
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  Speaker 2: Now what do you put that down to. Is that
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  Speaker 2: simply we don't have the discretionary cash we used.
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  Speaker 3: To have, But that's certainly what it's suggesting. But you know,
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  Speaker 3: we've got a number of clients in that sector, and
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  Speaker 3: a number of them are actually reporting very strong, really
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  Speaker 3: strong run into Christmases. So I think in that sector
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  Speaker 3: in particular, and you probably not yourself, heether, when you're
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  Speaker 3: walking down points right, there's some there's some operators who
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  Speaker 3: are really strong and going well, and then there's some
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  Speaker 3: that are answers. There's real winners and losers in that
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  Speaker 3: sector and probably not too many in the middle. So
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  Speaker 3: there's certainly many operators are going really well, but if
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  Speaker 3: you're not producing something that customers want, you really are struggling.
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  Speaker 3: So that's more of a winners and losers rather than
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  Speaker 3: a consistent. Everyone's down. Yeah.
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  Speaker 2: Now now the retail number strongest in eight years, down
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  Speaker 2: to Black Friday.
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  Speaker 3: Look a little bit of that. But also think those
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  Speaker 3: lower interest rates are starting to kick in. And I
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  Speaker 3: think when you think about your own spending, as soon
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  Speaker 3: as you start seeing a little bit of extra money
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  Speaker 3: in your bank account each week, you're probably going to
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  Speaker 3: hit the shops first, and then you might hit your
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  Speaker 3: services second. I think that's a bit of a leading
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  Speaker 3: indicator that actually, you know what, we have hit the
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  Speaker 3: bottom and things are slowly turned around, and services is
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  Speaker 3: just going to be the lagging factor, I think.
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  Speaker 2: Does I mean some people have looked at these numbers
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  Speaker 2: I've seen already and they've gone, jees, I don't know
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  Speaker 2: what this is for the outlook for economic recovery next year?
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  Speaker 2: Are you doing that as well?
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  Speaker 3: Look when you look at there's one number that stands
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  Speaker 3: out there. So the strongest number within that report was
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  Speaker 3: the new order number. So that's that's the most forward
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  Speaker 3: looking indicator you've got, and that's that's the heart. That's
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  Speaker 3: a forty nine percent, So it's still it's only just
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  Speaker 3: below fifty, which, as you rightly said, is the sort
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  Speaker 3: of midpoint and anything above that expansion. So I think
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  Speaker 3: with all our customers that we talk to, whether it
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  Speaker 3: be childcare, gyms, hospitality, they're all they're all thinking that
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  Speaker 3: they've hit the worst of it and things are starting
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  Speaker 3: to be on the improve. In twenty twenty six is
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  Speaker 3: going to be a far better year. So I think
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  Speaker 3: if you really read them between the numbers, the most
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  Speaker 3: forward looking indicator is the strongest, and regional wise used
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  Speaker 3: to be no workland and warring from the struggling, but
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  Speaker 3: they will come back and they'll follow the lead from
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  Speaker 3: out from the southoldto it, sort of benefiting from the
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  Speaker 3: primary and EG receptor is the way we look at it.
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  Speaker 2: Oh, that's fantastic news.
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  Speaker 3: Chris.
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  Speaker 2: You look after yourself. It's always good to talk to you.
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  Speaker 2: Chris Small, ABC Business Sales CEO.
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