According to the BNZ – BusinessNZ Performance of Services Index (PSI), New Zealand’s services sector continued to expand in September, extending its run of growth to four consecutive months.
The PSI for September was 50.9 (where a reading above 50.0 indicates the sector is generally expanding, and a reading below 50.0 indicates the sector is in contraction). This was down a touch from 51.0 in August, but above 50.5 in July.
BusinessNZ’s CEO, Katherine Rich said “Four months in a row above breakeven is a genuinely positive run for services, even with September’s slight easing. What stands out to me is how much caution is still baked into the sector, as businesses are clearly in ‘wait and see’ mode with the election approaching and that’s likely to keep a lid on any stronger lift until there’s more certainty.”
The respondent comments showed that cost of living pressures, fuel prices, interest rates and election uncertainty remain front of mind. Sentiment remained around similar levels as August, with 59.9% of comments being negative.
New Orders/Business and Stocks/Inventories were the joint strongest sub-indices, at 52.6 and 52.3 respectively. Supplier Deliveries was the weakest at 49.4, with Employment also soft at 49.8, reminding us the recovery is still narrow.
BNZ Senior Economist, Doug Steel said “This marks a fourth month of expansion, a notable feat after two years of contraction. But growth in the services sector remains weak, particularly compared to manufacturing as indicated by the Performance of Manufacturing Index (PMI), which has sat well above 50 for some time.”
