Expansion in New Zealand’s services sector climbed above its long term average level of activity, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
The PSI for October was 55.4, which was 0.9 points up from September (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). The October result was also exactly one point above the long term average of 54.4 for the survey.
BusinessNZ chief executive Kirk Hope said that after three months at the 54 point mark, it was pleasing to see the sector push through to its highest result since January this year.
“Looking at the key sub-index values, both new orders/business (62.1) and activity/sales (58.1) improved their result since January 2019 and May 2018 respectively, with the former showing strong expansion. Employment (52.0) fell marginally, while stocks/inventories (51.3) remained all but unchanged from the previous month.
Looking at comments from respondents, the lift in overall expansion was mirrored in the proportion of positive comments that went from 48.6% in September to 50.7% in October.
BNZ Senior Economist Craig Ebert said that “the firming in the PSI has been complemented by a sharp recovery in the Performance of Manufacturing Index (PMI) for October. Between the two of them, they now indicate annual GDP growth of closer to 2% than the 1% they portrayed just months ago”.
