BNZ – BusinessNZ
Performance of
Services Index

Lost momentum

13 Nov, 2023
48.9
October
-1.7

Monthly Change

Contracting
Previously Expanding

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 it is declining). This was down 1.7 points from September, and well below the long-term average of 53.5 for the survey.

BusinessNZ chief executive Kirk Hope said that the return to expansion in September was short lived, with the key sub-index results for Activity/Sales (47.4) and New Orders/Business (51.9) showing a lower level of activity in October. Employment (49.3) returned to slight contraction, while Supplier Deliveries (49.8) remained in a tight band of activity that has been evident over the last three months.

“Despite the October result falling back into contraction, the proportion of negative comments stood at 58.2% for October, which was down from 61.8% in September and 63.9% in August. Overall, negative comments continued to be strongly dominated by the recent General Election, as well as a general slowdown in the economy”.

Looking at the broader perspective, BNZ Senior Economist Craig Ebert said that “combined, the PSI (48.9) and PMI (42.5) paint a picture of economic angst. This counsels caution around GDP for Q3, after it posted a surprising gain of 0.9% in Q2”.

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

Ongoing struggle

As it has done for most of this year, the Performance of Services Index (PSI) struggled to even go sideways in October.

Read more

Principally patchy

The principal drag factor in October was activity/sales. This fell to a seasonally adjusted 47.4, from 50.9 in September (and has averaged 47.7 over the last 6 months).

Read more

More mixed than negative

While the PSI is averaging a bit below the breakeven level of 50, it also harbours quite the mixture of positives and negatives.

Read more

Broader perspective

While October’s election might have overly hampered the PSI over recent months, other factors have argued for the PSI to have done better than it has.

Read more

Craig Ebert

Craig Ebert

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 Oct 2022 Jun 2023 Jul 2023 Aug 2023 Sep 2023 Oct 2023
BNZ – BusinessNZ PSI 57.1 49.8 48.3 47.6 50.6 48.9
Activity/Sales 60.6 51.2 39.9 45.3 50.9 47.4
Employment 57.5 49.1 49.2 50.9 50.5 49.3
New Orders/Business 59.6 50.6 45.4 48.7 53.9 51.9
Stocks/Inventories 56.2 47.5 53.5 51.4 48.0 51.1
Supplier Deliveries 52.4 50.8 52.0 49.2 49.7 49.8

BNZ – BusinessNZ PSI Time Series

January 2019 – October 2023

International Results

J.P. Morgan Global Manufacturing PSITM

06 Nov 2023
50.4

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]

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BNZ – BusinessNZ
Performance of
Composite Index

48.4

GDP-Weighted Index

46.1

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 for October.

The October GDP-Weighted Index (48.4) decreased 1.7 points from September to fall back into contraction, while the Free-Weighted Index (46.1) fell 2.5 points and remained in contraction.

PCI Time Series Table

The results are seasonally adjusted.

National Indicies Oct 2022 Jun 2023 Jul 2023 Aug 2023 Sep 2023 Oct 2023
GDP-Weighted Index 56.4 49.7 48.4 47.5 50.1 48.4
Free-Weighted Index 53.3 48.8 47.6 47.0 48.6 46.1

BNZ – BusinessNZ PCI Time Series

January 2019 – October 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