BNZ – BusinessNZ
Performance of
Services Index

Activity on holiday

23 Jan, 2024
48.8
December
-2.3

Monthly Change

Contracting
Previously Expanding

New Zealand’s services sector fell back into contraction during December, according to the BNZ – BusinessNZ Performance of Services Index (PSI).

The PSI for December was 48.8 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). This was down 2.3 points from November, and well below the long-term average of 53.4 for the survey.

BusinessNZ chief executive Kirk Hope said that like its sister survey, the PSI has struggled over 2023 with the second half of the year averaging 49.3. While New Orders/Business (51.2) remained in expansion, Activity/Sales (47.1) has remained entrenched in contraction for the last three months. Employment (47.5) recorded its lowest result since February 2022.

“The proportion of negative comments stood at 58.7% for December, which was up from 54.0% for November and 58.2% in October. Overall, negative comments centered on seasonal factors, cost of living and an overall economic slowdown”.

BNZ Head of Research Stephen Toplis said that “the softening in the PSI, alongside the weakness in the PMI, is bad news for both near term growth and employment in New Zealand. Tourism has been a key driver of the services sector and will continue to support the economy, but it can’t do all the heavy-lifting by itself”.

Kirk Hope

Kirk Hope

CEO, BusinessNZ

BNZ - BusinessNZ PSI

Time Series Data

View seasonally adjusted and unadjusted time series data for the BNZ - BusinessNZ PSI

Services Landscape

Services outperform

The New Zealand economy would have looked so much worse over the last year or so had it not been for the strength of the services sector. And with tourist numbers still growing, the impacted components of the services sector are still managing to do their bit to support the wider economy.

Read more

But PSI turns down

However, it’s impossible for services to do all the heavy lifting if the remainder of the economy is struggling. Moreover, the recent past growth in tourism can’t be sustained given tourist numbers from many countries have already risen from near zero to similar levels to where they were pre-COVID.

Read more

Tourism a saviour

The ongoing role of tourism is, nonetheless, still there for all to see with accommodation, cafes and restaurants, and transport and storage, still outperforming other sectors.

Read more

Composite index portends recession

The softening in the PSI, alongside the weakness in the PMI, is bad news for both near term growth and employment in New Zealand. The composite index that we derive by combining the two performance indictors is consistent with the economy reaching a maximum annual contraction of around 2.0%.

Read more

Stephen Toplis

Stephen Toplis

Head of Research, BNZ

Sponsor Statement

BNZ is delighted to be associated with the Performance of Services Index (PSI) and BusinessNZ.

This association brings together the significant experience of leading business advocacy body BusinessNZ, and business finance specialist BNZ.

We look forward to continuing our association with BusinessNZ and associated regional organisations, and to playing our part in the ongoing development of the New Zealand service sector.

PSI Time Series Table

The results are seasonally adjusted.

National Indicies Dec 2022 Aug 2023 Sep 2023 Oct 2023 Nov 2023 Dec 2023
BNZ – BusinessNZ PSI 52.6 47.6 50.7 49.1 51.1 48.8
Activity/Sales 52.6 44.9 50.9 47.5 48.7 47.1
Employment 47.9 51.0 50.4 49.3 50.6 47.5
New Orders/Business 58.6 48.5 54.0 52.0 52.2 51.2
Stocks/Inventories 52.3 51.4 48.3 51.5 55.0 51.5
Supplier Deliveries 53.8 49.3 49.8 50.1 52.8 50.5

BNZ – BusinessNZ PSI Time Series

January 2019 – December 2023

International Results

J.P. Morgan Global Manufacturing PSITM

04 Jan 2024
51.6

About the PSI

The BNZ – BusinessNZ Performance of Services Index is a monthly survey of the service sector providing an early indicator of activity levels.

A PSI reading above 50 points indicates service activity is expanding; below 50 indicates it is contracting.

The main PSI and sub-index results are seasonally adjusted.

Technical Contact

Stephen Summers
Economist, BusinessNZ

[email protected]

PSI Releases

Green shoots?

New Zealand’s services sector climbed back into expansion for the start of 2024, according to the BNZ – BusinessNZ Performance of Services Index (PSI). The PSI for January was 52.1 (A PSI reading above 50.0 indicates that the service sector is generally expanding;...

Over the line

New Zealand’s services sector recorded expansion in November, according to the BNZ – BusinessNZ Performance of Services Index (PSI). The PSI for November was 51.2 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is...

Lost momentum

New Zealand’s services sector went back into contraction in October, according to the BNZ – BusinessNZ Performance of Services Index (PSI). The PSI for October was 48.9 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that...

Some spring in step

New Zealand’s services sector experienced a return to expansion in September, according to the BNZ – BusinessNZ Performance of Services Index (PSI). The PSI for September was 50.7 (A PSI reading above 50.0 indicates that the service sector is generally expanding;...

Uncertain times

New Zealand’s services sector experienced its third consecutive drop in activity levels, according to the BNZ – BusinessNZ Performance of Services Index (PSI). The PSI for August was 47.1 (A PSI reading above 50.0 indicates that the service sector is generally...

BNZ – BusinessNZ
Performance of
Composite Index

48.4

GDP-Weighted Index

46.8

Free-Weighted Index

The seasonally adjusted BNZ – BusinessNZ Performance of Composite Index or PCI (which combines the PMI and PSI) saw the two options for measuring the PCI both in contraction during December.

The December GDP-Weighted Index (48.4) decreased 2.3 points from November, while the Free-Weighted Index (46.8) fell 2.2 points.

PCI Time Series Table

The results are seasonally adjusted.

National Indicies Dec 2022 Aug 2023 Sep 2023 Oct 2023 Nov 2023 Dec 2023
GDP-Weighted Index 52.4 47.5 50.2 48.5 50.7 48.4
Free-Weighted Index 51.2 47.0 48.7 46.3 49.0 46.8

BNZ – BusinessNZ PCI Time Series

January 2019 – December 2023

About the PCI

The BNZ – BusinessNZ Performance of Composite Index (PCI) takes into account results from both the Performance of Manufacturing Index (PMI) and the Performance of Services Index (PSI). Combined results are shown in two ways:

GDP-Weighted Index:
Apportions the weight of the manufacturing and services index within the economy to produce an overall result.

Free-Weighted Index:
Combines data from both indexes to produce an overall result.

Both time series for the PCI are then seasonally adjusted.

BNZ - BusinessNZ PCI

Time Series Data

View seasonally adjusted and unadjusted time series data for the BNZ - BusinessNZ PCI

Our Contributors

The BNZ – BusinessNZ PSI contains data obtained through BusinessNZ’s regional organisations