BNZ – BusinessNZ
Performance of
Services Index

Bottom of the Barrel

17 Jun, 2024
43.0
May
-3.6

Monthly Change

Contracting
Faster Rate

Activity in New Zealand’s services sector dropped to its lowest level of activity for a non-COVID lockdown month since the survey began, according to the BNZ – BusinessNZ Performance of Services Index (PSI).

The PSI for May was 43.0 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). This was down 3.6 points from April and the lowest level of activity for the sector for a non-COVID lockdown month since the survey began in 2007.

BusinessNZ chief executive Kirk Hope said that the May result was as bad is it can get for the sector, reaching contraction levels greater than during the Global Financial Crisis of 2008/09. While most of the sub-index values didn’t reach their lowest ever levels, combined they led the May result well below the long-term average of 53.3. The key index values for Activity/Sales (40.9) and New Orders/Business (42.6) were both in significant contraction, while the Stocks/Inventories (42.4) activity level was the lowest recorded for a non-COVID month.

The proportion of negative comments for May (65.4%) was similar to April (66.3%). Given the overall result, respondents continued to note the typical aspects of the current economic downturn.

BNZ’s Senior Economist Doug Steel said that “the speed of decline is as worrisome as its size over the past three months. There is weak and then there is very weak. Overall, this tells of a services sector in reverse, at pace”.

Activity/Sales
40.9
Employment
46.0
New Orders/
Business
42.6
Stocks/Inventories
42.4
Supplier
Deliveries
46.1
42.8
45.6
45.7
50.0
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

Ugly

There was very little to like in May’s Performance of Services Index (PSI). The PSI fell to 43.0 in May from April’s already weak 46.6. This extends a rapid decline from February’s ok looking 52.4.

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All well below average

All major PSI components fell in the month. This puts them all further and significantly below average. Activity/sales was the weakness in May on an outright basis, at 40.9.

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Retail pain

Most industries are in retreat, with retail’s PSI 33.8 the weakest of all and its lowest ever May result. As one PSI respondent put it, ‘sudden drop in sales’ and ‘average order volume down significantly’.

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Growth negative

All the above suggests downside risk to Q2 GDP (Q1 figures are due this week). Combining the very weak PSI with last week’s soft PMI yields a composite index that points to GDP falling by more than many might care to believe.

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Doug Steel

Doug Steel

Senior Economist, 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 May 2023 Jan 2024 Feb 2024 Mar 2024 Apr 2024 May 2024
BNZ – BusinessNZ PSI 52.8 51.9 52.4 47.0 46.6 43.0
Activity/Sales 52.1 52.7 52.3 44.6 46.0 40.9
Employment 52.6 48.3 49.2 49.8 47.0 46.0
New Orders/Business 54.9 51.9 55.2 47.7 46.6 42.6
Stocks/Inventories 56.7 53.0 51.8 46.4 46.2 42.4
Supplier Deliveries 51.2 48.5 48.5 48.5 47.5 46.1

BNZ – BusinessNZ PSI Time Series

January 2019 – May 2024

International Results

J.P. Morgan Global Manufacturing PSITM

05 Jun 2024
54.1
USA
54.8
UK
52.9
Eurozone
53.2
China
54.0
Japan
53.8
Australia
52.5
NZ
43.0

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

Struggle street

New Zealand’s services sector continued to contract further in April, according to the BNZ – BusinessNZ Performance of Services Index (PSI). The PSI for April was 47.1 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that...

Lost momentum

New Zealand’s services sector fell back into contraction during March, according to the BNZ – BusinessNZ Performance of Services Index (PSI). The PSI for March was 47.5 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that...

Path of expansion

New Zealand’s services sector continued its path of expansion in February, according to the BNZ – BusinessNZ Performance of Services Index (PSI). The PSI for February was 53.0 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below...

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;...

Activity on holiday

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...

BNZ – BusinessNZ
Performance of
Composite Index

43.4

GDP-Weighted Index

44.7

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 at lowest or near lowest levels.

The May GDP-Weighted Index (43.4) decreased a further 2.3 points from April to reach its lowest ever level for a non-COVID lockdown month, while the Free-Weighted Index (44.7) decreased 2.6 points to be at its lowest level since April 2009.

PCI Time Series Table

The results are seasonally adjusted.

National Indicies May 2023 Jan 2024 Feb 2024 Mar 2024 Apr 2024 May 2024
GDP-Weighted Index 52.3 51.5 52.1 46.9 45.7 43.4
Free-Weighted Index 50.5 50.1 50.8 46.5 47.3 44.7

BNZ – BusinessNZ PCI Time Series

January 2019 – May 2024

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