Expansion levels for New Zealand’s services sector lifted during the first month of 2023, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
The PSI for January was 54.5 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). This was up 2.5 points from December, and above the long-term average of 53.6 for the survey.
BusinessNZ chief executive Kirk Hope said that the January result reversed its continued drop in expansion levels seen over November and December. In terms of the sub-index results, Activity/Sales (52.1), Employment (51.9) and Stocks/Inventories (54.3) all rose in January. In contrast, New Orders/Business (54.5) eased in expansion to its lowest result since April 2022, while Supplier Deliveries (52.0) decreased 1.9 points.
“Despite the halt in lower expansionary levels, the trend of a higher proportion of negative comments continued in January (61.7%), compared with 58.2% in December and 47.3% in November. The holiday season was a common theme, along with the shortage of labour and general market uncertainty that has been evident for some months now”.
BNZ Senior Economist Doug Steel said that “as encouraging as January’s PSI result might look, we are reluctant to read too much into one month’s result – especially around the holiday period”.