BNZ – BusinessNZ
Performance of
Services Index

Struggle street – PSI

21 Jan, 2019
51.9
December
-1.0
expanding
slower rate

New Zealand’s services sector ended the year on a low point, according to the BNZ – BusinessNZ Performance of Services Index (PSI).

The PSI for December was 51.9, which was 1 point down from November (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).  The December result was also the lowest level of expansion since September 2012, and well below the long term average of 54.4 for the survey.

BusinessNZ chief executive Kirk Hope said that despite the sector not falling into contraction at any stage during 2019, the weak December result was a disappointing end to the year.

“The headline PSI figure averaged 53.8 over 2019, which was below the 54.9 experienced in 2018 and well below the 57.0 mark for 2017.  The fact that new orders, which is one of the key sub-index values has now recorded consecutive low expansion values not seen since 2011 shows how much ground the sector needs to make up to get back on track.

BNZ Senior Economist Craig Ebert said that “December’s PSI unequivocally counsels caution for the time being. Indeed, combining the weak PSI with last week’s retreat in the PMI suggests the economy may be currently travelling at a sub-2% rate.”.

Kirk Hope

Kirk Hope

CEO, BusinessNZ

BNZ - BusinessNZ PSI

Time Series Data

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

Services Landscape

Hang on a minute

As the New Year gets underway, there seems to be some hope building that the economy will do better in 2020 than it did in 2019. Various business confidence surveys have shown a little less pessimism recently. And, so the story goes, the hard data will start to show improvement before too long. If that is the story, the script did not get to the Performance of Services Index respondents in December.
Read more

Signal or noise?

At this point, it is difficult to determine if the PSI dip is a signal of more weakness ahead or rather a result of the material uncertainty prevailing through the latter part of last year.  We say this as December’s economic data is notoriously tricky to decipher signal from noise with various holidays and trading day changes occuring.
Read more

Grounds for hope

With the housing market warming up again, an important consideration for the service sector – and the economy as a whole – this year is how much it encourages household spending. Evidence to date is mixed with fits and starts in the likes of the electronic cards transactions data through November and December. For the PSI, at least to date, the indications are unambiguously weak.
Read more

Craig Ebert

Craig Ebert

Senior Economist, BNZ

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.

National Indicies Dec
2018
Aug
2019
Sep
2019
Oct
2019
Nov
2019
Dec
2019
BNZ – BusinessNZ PSI 53.3 54.7 54.4 55.1 52.9 51.9
Activity/Sales 53.0 56.4 54.4 57.8 53.9 52.6
Employment 50.3 53.6 52.5 51.5 51.6 52.3
New Orders/Business 59.5 56.8 58.8 62.4 53.7 54.5
Stocks/Inventories 51.8 53.2 51.2 51.2 59.0 51.5
Supplier Deliveries 52.5 51.8 50.5 49.6 51.6 48.6

BNZ – BusinessNZ PSI Time Series

December 2015 – December 2019

International Results

J.P. Morgan Global Manufacturing PSITM

06 Jan 2020
52.1

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.

PSI Releases

Uplift – PSI

Expansion levels for New Zealand's services sector saw a sizeable uplift in August, according to the BNZ - BusinessNZ Performance of Services Index (PSI).The PSI for August was 58.6 (A PSI reading above 50.0 indicates that the service sector is generally expanding;...

Easing off – PSI

Expansion levels for New Zealand's services sector decreased in July, according to the BNZ - BusinessNZ Performance of Services Index (PSI).The PSI for July was 51.2 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it...

Consistent service – PSI

Activity levels for New Zealand’s services sector in June displayed almost identical levels to last month, according to the BNZ – BusinessNZ Performance of Services Index (PSI).

Upwards momentum – PSI

Activity levels in New Zealand’s services sector displayed upwards momentum during May, according to the BNZ – BusinessNZ Performance of Services Index (PSI).

Evening out – PSI

Activity levels in New Zealand’s services sector during April were almost identical to March, according to the BNZ – BusinessNZ Performance of Services Index (PSI).

BNZ – BusinessNZ
Performance of
Composite Index

The seasonally adjusted BNZ – BusinessNZ Performance of Composite Index or PCI (which combines the PMI and PSI) saw the two options for measuring the PCI both decrease again from the previous month.

The December GDP-Weighted Index (51.8) decreased 0.9  points from November, while the Free-Weighted Index (51.2) fell 1 point.  The fact that both the manufacturing and services sectors displayed lower levels of activity in December caused the two options to measure the PCI to fall.

PCI Time Series Table

The results are seasonally adjusted.

National Indices Dec
2018
Aug
2019
Sep
2019
Oct
2019
Nov
2019
Dec
2019
GDP-Weighted Index 53.8 54.0 53.7 54.7 52.7 51.8
Free-Weighted Index 55.1 51.9 51.9 54.8 52.2 51.2

BNZ – BusinessNZ PCI Time Series

December 2015 – December 2019

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