The services sector is adding jobs for the first time in 10 months but the outlook remains uncertain.
The BNZ-Business NZ Performance of Services Index (PSI) lifted in December to 49.2 points but it is still in contraction, and well below its long run historical average of 54.
A reading above 50 indicates growth, while anything below suggests contraction.
The employment sub-index rose more than 2 points to 51.7, indicating firms are taking on new staff for the first time since the March lockdown.
BNZ senior economist Craig Ebert said: “The sector is quite patchy, some bits are doing well others not and the averages are fairly flat.
“It was an improvement of course from November but in the sense less contractionary than it was, it really is a steady result with some pretty mixed pictures underneath.”
New orders slipped over the month and the measure of inventory stocks and supplier deliveries continue to languish at levels well below 50.
Ebert said there was some evidence that stretched supply-chains were having an effect on the industry.
“Even though the demand side is sort of okay, the services sector is struggling to get stuff in to get stuff done.”