Activity in New Zealand’s services sector reached higher levels in August, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
The PSI for August was 58.2. This was a 1.6 point increase from July, and the highest result since July 2014 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).
BusinessNZ chief executive Phil O’Reilly said that with the key indicators of activity/sales and new orders consistently above the 60-point mark, it bodes well for continuing growth in the months ahead.
“Although the proportion of positive comments in August (59.2%) was lower than July (64.1%), those who stipulated positive influences noted a combination of business as usual, along with new clients/opportunities present”.
BNZ Senior Economist Craig Ebert said that along with the PMI – which also increased in August, to a solid level – the PSI thus paints a picture of an economy growing at a rate much better than normal.
“This is not to deny the headwinds that face the economy. However, we also need to acknowledge that growth in the current (September) quarter could well be shaping up as strong.”