According to the BNZ – BusinessNZ Performance of Services Index (PSI) the services sector in New Zealand contracted in April, albeit more slowly than in March.
The PSI for April was 48.9 (where a reading above 50.0 indicates the sector is generally expanding, and a reading below 50.0 indicates the sector is in contraction). The PSI reading for March was 46.2.
BusinessNZ’s CEO, Katherine Rich said “More than two-thirds of the respondents commented that the factors influencing their business during the past month were negative, and many of the comments focused on fuel prices. With the continuing conflict affecting shipping through the Strait of Hormuz, it is difficult to foresee a quick return to expansion in the sector.”
Despite the generally weak performance of the sector, the New Order sub-index was in expansion, at 51.2. However, all four of the other sub-indexes were showing contraction, with the weakest being Supplier Deliveries at 46.6.
Micro-businesses (those with 1-10 employees) were finding it particularly tough in April, with their sub-index reading at 44.4, but Medium-Large firms (with 51-100 employees) seem to be in healthy expansion at a sub-index level of 55.5.
BNZ’s Head of Research, Stephen Toplis said that “At first glance the jump in the headline index from 46.2 in March to 48.9 in April might be read as hope the New Zealand economy is proving to be remarkably resilient to the war in the Middle East. On the other hand, it could be interpreted as further evidence the economy is struggling to get its head above water.”
