BNZ – BusinessNZ
Performance of
Services Index

Service sector closes 2010 on similar note – PSI

25 Jan, 2011

Overall activity in the service sector for the last month of 2010 ended up being a repeat of 2009, according to the BNZ – BusinessNZ Performance of Services Index (PSI).

The PSI for December was 52.5. This was up 0.8 points from November, and the same level of activity as December 2009.  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 2008 was 49.1, while for 2009 it was 48.8. Encouragingly, the average score for 2010 was in positive territory at 53.2.

BusinessNZ chief executive Phil O’Reilly said that while it would have been good to see the service sector experience a stronger end to the 2010 year, there were still positives to take out of what continues to be a difficult environment for many businesses.

“Throughout 2010 the sector has remained in expansion, compared with seven of twelve months in contraction for 2009. Also, new orders/businesses continue to exhibit healthy results, which will hopefully translate into further sales in the months ahead. Globally, the service sector is reaching activity levels not seen since 2007, which should provide further momentum towards a recovery and sustained growth.

Bank of New Zealand economist Doug Steel said, “Retailers have experienced consumer spending restraint first-hand over recent years.

“Underlying restraint has extended to late 2010, judging by last week’s retail sales data for November and the previously released dip in electronic card transactions in December. The latest data have continued the recent traits of consumer spending – volatile with underlying weakness.  Business surveys suggest some improvement ahead in 2011.”

Three of the five sub-indices were in expansion mode during December, with two indices remaining largely unchanged compared with previous months.  Employment (49.4) remained within the 49-point range for the third consecutive month, while stocks/inventories (50.9) remained in the 50-point range for the fourth consecutive month. Encouragingly, new orders/business (56.8) continued to improve, closely followed by activity/sales (56.3). Supplier deliveries (48.7) remained in contraction for the second consecutive month.

After a tale of two islands during October and November, December saw all four main regions experience expansion. The Northern region (54.7) remained in expansion, although slightly down on previous results. Interestingly, the Northern region was the only one to experience expansion for every month of 2010. The Central region (51.6) returned to expansion levels experienced in October, while both the Canterbury/Westland (50.1) and Otago/Southland (61.0) improved from almost identical levels of activity in November.

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

For media comment: Phil O’Reilly 04 4966552 or Doug Steel 04 474 6923

BNZ - BusinessNZ PSI

Time Series Data

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

Services Landscape

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

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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.

Technical Contact

Stephen Summers
Economist, BusinessNZ

[email protected]

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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

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

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The BNZ – BusinessNZ PSI contains data obtained through BusinessNZ’s regional organisations