Like its sister survey in the manufacturing sector, activity in New Zealand’s services sector rose back into expansion, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
The PSI for June was 54.1, which was 16.6 points up from May (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). This was the first time the sector exhibited expansion since February, and the highest value since January.
BusinessNZ chief executive Kirk Hope said that the comments from respondents underlie the two broad effects COVID-19 is currently having on the sector.
On the positive side, a number outlined a catch-up or bounce back from post lockdown conditions. However, those outlining negative comments are squarely centred on the disruption COVID-19 is still playing on their business. With comments split 44.4% vs 55.6% in terms of a negative stance, there is still scope for improvement ahead.
BNZ Senior Economist Doug Steel said that “activity/sales and new orders, which were hit hard over recent months, have led the bounce back. The activity/sales index has ramped up to 58.7 from 32.7 in May, while new orders jumped to 59.6 from 35.2. It is positive, if only one step forward after a giant leap backwards”.
