According to the BNZ – BusinessNZ Performance of Services Index (PSI), New Zealand’s services sector continued to expand in August, extending its run of growth to three consecutive months.
The PSI for August was 51.2 (where a reading above 50.0 indicates the sector is generally expanding, and a reading below 50.0 indicates the sector is in contraction). This was up slightly from 50.6 in July, and above 50.9 in June. August’s reading matches December 2025, and is the highest the PSI has been since September 2023.
BusinessNZ’s CEO, Katherine Rich said “It’s encouraging to see the PSI post its strongest reading since returning to growth, though at 51.2 this remains a fragile recovery. With three of the five sub-indices still below 50, there’s clearly more ground to make up before we can call this a solid turnaround.”
The respondent comments showed that cost of living pressures, interest rates, and election uncertainty remain front of mind for many. Sentiment softened compared to July, with 60.8% of comments negative.
New Orders/Business was the strongest sub-index, at 55.2, followed by Stocks/Inventories at 50.8. Supplier Deliveries was the weakest at 49.0, with Employment and Activity/Sales also soft at 49.4 apiece, a reminder that the recovery remains narrowly based.
BNZ Senior Economist, Doug Steel said “The PSI’s three-month moving average keeps rising and, at 50.9, is at its highest level since July 2023. This gives some confidence that the sector is trending upwards, even if the recovery remains fragile.”
