New Zealand's services sector, which accounts for about two-thirds of the economy, bounced back in May after a number of external factors corrected themselves.
The BusinessNZ-Bank of New Zealand performance of services index rose 5.6 points to 58.8 in May.
A reading of 50 separates expansion from contraction, and New Zealand's services sector has been in expansion since July 2010.
"It turned out that New Zealand's performance of services index (PSI) had a bungee cord tied firmly around its ankles. And so, having dropped precipitously to 53.2 in April, it bounced all the way back up to 58.8 in May," said Bank of New Zealand senior economist Craig Ebert.
In April, a combination of school holidays and unseasonably wet weather were seen as weighing on activity.
Four of the five sub-indices were higher in May with activity/sales at 63.1 versus 52.4, new orders/business at 63.2 versus 55.5 in April, stocks/inventories at 54.9 versus 46.4 and supplier deliveries at 55.4 versus 48.2. Only employment was lower at 54.4 versus 55.7.
Across the regions, Northern services activity rose 7.1 points to 59, while Central rose 3.5 points to 59, Canterbury/Westland rose 4.3 points to 57.8 while Otago/Southland rose 5.5 points to 54.9.
The PSI follows its sister survey, the performance of manufacturing index, which showed manufacturing activity expanded in May, reaching the highest value since January 2016 and boding well for second-quarter economic growth.
The Bank of New Zealand-BusinessNZ performance of manufacturing index was a seasonally adjusted 58.5 in May, 1.6 points higher than in April.
The composite index, which marries the two surveys, rose 4.7 points to 58.5 on a GDP-weighted basis and gained 4.5 points to 59.3 on a free-weighted basis.