Activity in New Zealand’s services sector returned to contraction mode for August, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
The PSI for August was 46.9, which was down 7.5 points from July (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).
BusinessNZ chief executive Kirk Hope said that unlike its sister survey for the manufacturing sector, the PSI returned to negative territory on the back of the level 3 lockdown in the Auckland region.
“The lockdown was felt throughout the country, as no region managed to show expansion during August. Following previous patterns, a drop down to level 2 should reignite activity. Barring a further outbreak in a major region, we would hope the sector gets back into expansion for the last quarter of 2020.
BNZ Senior Economist Craig Ebert said that “when the PSI and PMI are combined into a Composite Index (PCI), they hardly expunge the notion that GDP is on course to rebound markedly in Q3.”