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Speaker 1: Now, the service sector has been contracting further. The latest

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Speaker 1: Performance of Services Index shows that activity levels fell three

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Speaker 1: point six percent in May. That is the lowest level

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Speaker 1: since the survey began seventeen years ago, with the exception

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Speaker 1: of the COVID Lockdown's Kirk Hope is the chief executive

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Speaker 1: of Business New Zealand.

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Speaker 2: Hey, Kirk, good evening. Well it's not that good an evening, But.

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Speaker 1: Put us in context for me, how worried you about this?

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Speaker 2: Well, I mean, I think you just said it's the

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Speaker 2: worst result monthly results since the saivey began in two

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Speaker 2: thousand and seven a minute. It's consistent with other data

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Speaker 2: which we saw for May, which is certainly the spin

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Speaker 2: down across the board and particularly in the services sector.

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Speaker 2: It's consistent with other data that it's out there as well,

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Speaker 2: more generally in business with profit margins below below pre

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Speaker 2: COVID rates, and then you're looking at corporate insolvencies that

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Speaker 2: are around about the same level as during GC. So

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Speaker 2: this is this is a pretty tough time.

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Speaker 1: Not only is the size worrying but the speed as well. Right,

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Speaker 1: what does that tell us?

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Speaker 2: Yeah, well, I'm mean I think that's that's one of

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Speaker 2: the biggest challenges is the very speedy contraction. And look,

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Speaker 2: the reality is if you think about the pace at

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Speaker 2: which the breaks when on the economy with interest rate rises,

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Speaker 2: that's that's starting to flow through in a fairly significant way. Now,

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Speaker 2: that's really what we're seeing. I think in a lot

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Speaker 2: of the data.

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Speaker 1: Do you think, Kirk. I mean, we're waiting for the figures,

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Speaker 1: the GDP figures to come out on Thursday. Is this

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Speaker 1: going to tell us that we're still in recession if

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Speaker 1: you look at these kinds of numbers.

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Speaker 2: Well, well I think so. But even if it doesn't,

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Speaker 2: it will it will it will say we're flat as

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Speaker 2: opposed to growing. I suspect, which which again you know,

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Speaker 2: really reflects the challenging set of circumstances. I mean, I

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Speaker 2: was talking to a business leader on Friday and you know,

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Speaker 2: I said, how you're feeling and he says, the mentor

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Speaker 2: in this industry has survived till twenty five. So that's

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Speaker 2: how they're feeling in general about the stay of play.

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Speaker 1: Kirk, thank you so much, man, and hope hopefully things

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Speaker 1: get better. That's Kirk Hope, Chief Executive Business New Zealand.

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Speaker 1: For more from Hither, Duplessy Allen Drive. Listen live to

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