BNZ – BusinessNZ
Performance of
Services Index

Service sector activity picks up heading into Christmas – PSI

14 Dec, 2009

The service sector is showing solid activity as Christmas approaches, according to the BNZ Capital – BusinessNZ Performance of Services Index (PSI).

The PSI for November stood at 56.0, 6.1 points up from October, and the highest level of activity since November 2007. In comparison with previous years, the November result was 8.7 points up from November 2008, but 6.6 points down from 2007. A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining. The average PSI value for 2007 was 58.1, while for 2008 it was 49.1. So far for 2009, the average score has been 48.3.

BusinessNZ Chief Executive Phil O’Reilly said the pick-up in activity does not come as a complete surprise, given the survey is not yet at the stage of taking out seasonal factors. However, the make-up of the lift is encouraging.

“Whether the data is broken down by sub-index, region or size of business, there is a consistent message of expansion across the board with levels not seen in many categories since late 2007/early 2008. The sub-indices of activity/sales and new orders/business continue to dominate the extent of expansion, as the traditional Christmas rush for orders and sales occurs due to customers wanting tasks completed by the end of the year.

“On the negative side, comments from some respondents continue to focus on key phrases such as ‘recession’, lack of demand’ and ‘smaller margins’. There are still many businesses that will experience another quiet Christmas like 2008 and can only hope that 2010 will bring better fortunes with improving consumer confidence translating into increased sales.”

Bank of New Zealand’s Head of Research, Stephen Toplis, said that “Businesses have every justification to be guardedly optimistic going into calendar 2010. The PSI is consistent with the BNZ’s own view that the economy will expand 2.5% through 2010.”

However, he warns that “such growth is likely to be accompanied by rising interest rates and further upward pressure on the NZD so businesses would be well advised to adopt conservative debt and foreign exchange rate management tactics.”

The current month was the first time since February 2008 that all sub-indices were in expansion mode. The two major contributors to the increase in overall activity came from a 10.3 point lift in activity/sales (58.7) and an 8.5 point lift in new orders/business (61.1). Employment (51.2) continued to edge up higher, while stocks/inventories (50.6) and deliveries (54.3) recorded their highest values since November 2008 and November 2007 respectively.

Activity was positive for all four main regions during November, with the Otago/Southland region (59.4) leading the way with its highest results since February 2008. This was closely followed by the Central region (59.3), which had broken free of a tight band of results during the previous three months. The Canterbury/Westland region (56.0) continued to build on previous results, while the Northern region (54.8) returned to similar expansion levels experienced in September.

Click here to view the November PSI & PCI
Click here to view the PSI time series data
Click here to view the PCI time series data

For media comment: Stephanie Moakes, ph 04 496 6554, or 021 959 831
Stephen Toplis, ph 04 474 6905

BNZ - BusinessNZ PSI

Time Series Data

View seasonally adjusted and unadjusted time series data for the BNZ - BusinessNZ PSI

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.

BNZ – BusinessNZ PSI Time Series

January 1966 – January 1970

International Results

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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.

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BNZ – BusinessNZ
Performance of
Composite Index

PCI Time Series Table

The results are seasonally adjusted.

BNZ – BusinessNZ PCI Time Series

January 1966 – January 1970

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