New Zealand’s services sector started the year on a pleasing note, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
The PSI for January was 57.1, which was 5 points up from December (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). The January result was also the highest level of expansion since March 2018, and clear above the long term average of 54.4 for the survey.
BusinessNZ chief executive Kirk Hope said that the pick-up in activity for the first month of 2020 was welcome after a lacklustre 2019.
“The key drivers of the January result was a combination of new orders (62.8) getting back over the 60-point mark, as well as activity/sales (57.0) lifting to its highest level since January 2019. Supplier deliveries (56.5) also saw its strongest result since June 2017.”
“Any continuation of January’s result in the months ahead will depend on new business opportunities and consistent sales to drive activity further.”
BNZ Senior Economist Doug Steel said that “for now, January’s glowing PSI report fits with the rather upbeat view of the economy expressed by the Reserve Bank last week. In the least, it helps offset a still soft looking PMI. Regardless, the near term outlook heavily depends on how much – and for how long – disruption occurs as a result of local weather conditions and COVID-19”.
