Expansion levels for New Zealand’s services sector decreased in July, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
The PSI for July was 51.2 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). This was down 3.5 points from June, and the lowest level of activity since February 2022. It was also below the long-term average of 53.6 for the survey.
BusinessNZ chief executive Kirk Hope said that after two consecutive months of healthy activity in the sector, the fall in expansion levels was evident across all the sub index values. The two key sub-indexes of New Orders/Business (52.5) and Activity/Sales (54.4) both dropped, with the former down from consecutive 60+ values. Employment (49.2) fell back into contraction, while Supplier Deliveries (47.3) has remained in contraction since July 2020.
Despite the drop in expansion with the previous month, the proportion of negative comments in July (58.2%) was relatively close to 59% in June.
BNZ Senior Economist Doug Steel said that “it is difficult to be sure from one month’s data, but July’s outcome is the lowest since February, has retreated further from the recent 54.9 peak set in May, and is back below average.”