BNZ – BusinessNZ
Performance of
Services Index

Over the line – PSI

20 Jul, 2020
54.1
June
+16.6
expanding
previously contracting

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”.

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

Better Service

The Performance of Services Index (PSI) looked a lot better in June than it has recently. In numbers, 54.1 in June versus 37.5 and 25.8 in May and April respectively. Now back above 50, the PSI indicates that the service sector is growing again. This is welcome news, even if it is growth off a low base at this stage.
Read more

Spending Up

Improving PSI activity indicators coincide with a decent lift in the value of electronic card transactions in June. Total transactions extended the bounce from April’s lockdown lows with a lift of over 19% in June to push just above pre-COVID levels. As good as this looks, summing total transactions over the past four months compared to the same period a year earlier reveals a decline of 16.4%.
Read more

Housing Resilient

June’s Real Estate Institute housing market figures confirmed a bounce back in activity. House sales were 7.1% higher than a year ago and are back near pre-COVID levels, on a seasonally adjusted basis. Prices were also buoyant with the REINZ House Price Index rising 0.9% in the month, to be up 8.6% on a year earlier.
Read more

Not All Improving

Not everything is moving forward. Among the major components, employment remains the laggard. Yes, June’s 45.1 is higher than May’s 40.5, but it has only returned to levels seen during the 2008/09 recession and is still sub-50 indicating service sector job losses. It was a similar story for the Performance of Manufacturing Index (PMI) released last week.
Read more

Doug Steel

Doug Steel

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 Jun
2019
Feb
2020
Mar
2020
Apr
2020
May
2020
Jun
2020
BNZ – BusinessNZ PSI 53.3 52.2 36.2 25.8 37.5 54.1
Activity/Sales 55.4 54.4 29.3 11.1 32.7 58.7
Employment 51.3 50.5 46.1 42.1 40.5 45.1
New Orders/Business 55.6 54.7 32.3 16.6 35.2 59.6
Stocks/Inventories 53.8 51.4 45.4 45.6 46.2 53.4
Supplier Deliveries 50.0 44.3 33.9 25.0 40.4 53.4

BNZ – BusinessNZ PSI Time Series

June 2016 – June 2020

International Results

J.P. Morgan Global Manufacturing PSITM

06 Jul 2020
48.0

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.

PSI Releases

Uplift – PSI

Expansion levels for New Zealand's services sector saw a sizeable uplift in August, according to the BNZ - BusinessNZ Performance of Services Index (PSI).The PSI for August was 58.6 (A PSI reading above 50.0 indicates that the service sector is generally expanding;...

Easing off – PSI

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...

Consistent service – PSI

Activity levels for New Zealand’s services sector in June displayed almost identical levels to last month, according to the BNZ – BusinessNZ Performance of Services Index (PSI).

Upwards momentum – PSI

Activity levels in New Zealand’s services sector displayed upwards momentum during May, according to the BNZ – BusinessNZ Performance of Services Index (PSI).

Evening out – PSI

Activity levels in New Zealand’s services sector during April were almost identical to March, according to the BNZ – BusinessNZ Performance of Services Index (PSI).

BNZ – BusinessNZ
Performance of
Composite 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 rise into expansion for June.

The June GDP-Weighted Index (54.5) increased 16.7 points from May, while the Free-Weighted Index (55.9) rose 17.7 points.

PCI Time Series Table

The results are seasonally adjusted.

National Indices Jun
2019
Feb
2020
Mar
2020
Apr
2020
May
2020
Jun
2020
GDP-Weighted Index 53.1 52.5 36.1 25.6 37.8 54.5
Free-Weighted Index 52.7 53.4 36.2 23.9 38.2 55.9

BNZ – BusinessNZ PCI Time Series

June 2016 – June 2020

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