BNZ – BusinessNZ
Performance of
Services Index

Waiting game – PSI

19 Aug, 2019
54.7
July
+1.7
expanding
faster rate

Activity in New Zealand’s services sector improved in July, according to the BNZ – BusinessNZ Performance of Services Index (PSI).

The PSI for July was 54.7, which was 1.7 points up from June, and the highest recorded activity level since January this year (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).  The July result was also above the long term average of 54.4 for the survey.

BusinessNZ chief executive Kirk Hope said that the pick-up in activity during July was pleasing to see, although the increase needs to be put in context of some potential headwinds.

“After a very sluggish first half of the year for the sector, the July result was boosted by a lift to both new orders/business (58.2) and activity/sales (57.2), which are the key sub-indexes to monitor.  However, one cannot ignore its sister survey showing the manufacturing sector in contraction for the first time in seven years.  Whether the July result for the PSI is the start of a genuine improvement going forward or just a time delay until other aspects of the economy affect the services sector remains to be seen. 

“Of the other sub-indexes, employment (51.7) improved slightly from June but remains soft, while supplier deliveries (48.8) fell further into contraction.

Looking at comments from respondents, the proportion of positive comments for July (47.6%) continued to fall compared with June (49.0%) and May (56.6%).    

BNZ Senior Economist Doug Steel said that “one should be cautious in reading too much into one month’s data, but the positive result is good to see and especially in the context of weakness appearing in a few other leading indicators”.

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

Don’t Worry, Be Happy

After seeing a big drop into negative territory last week in the Performance of Manufacturing Index (PMI), it was with some trepidation we approached the Performance of Service Index (PSI). It turns out we shouldn’t have worried.
Read more

Detail

The details generally support the upbeat tenor of July’s PSI. Sales rose to 57.2 from 55.0 in June. This is now comfortably above its long term average of 55.9 and is significantly above a recent low of 51.7 back in April.
Read more

GDP Implications

The better-looking PSI offers some hope that GDP growth in the service sector can hang together in the second half of the year. That’s our forecast, albeit with downside risks.
Read more

Spending and Housing

Recent spending indicators have underwhelmed. The total value of electronic card transactions fell a seasonally adjusted 0.3% in July. This extended a soft patch of preceding months.
Read more

Doug Steel

Doug Steel

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 Jul
2018
Mar
2019
Apr
2019
May
2019
Jun
2019
Jul
2019
BNZ – BusinessNZ PSI 53.2 52.6 52.1 53.6 53.0 54.7
Activity/Sales 54.6 52.8 51.7 55.1 55.0 57.2
Employment 50.2 51.1 48.2 50.9 51.0 51.7
New Orders/Business 58.6 55.0 55.2 56.0 55.3 58.2
Stocks/Inventories 50.2 50.3 49.1 56.8 53.6 54.4
Supplier Deliveries 49.4 50.6 51.2 51.3 49.1 48.8

BNZ – BusinessNZ PSI Time Series

July 2015 – July 2019

International Results

J.P. Morgan Global Manufacturing PSITM

05 Aug 2019
52.5

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 showing contrasting results in July.

The July GDP-Weighted Index (54.1) increased 1.2 points from June, while the Free-Weighted Index (52.1) decreased 0.4 points.  The increase in the former was due to a lift in services sector activity, while the latter was dragged down by a fall in manufacturing activity.

PCI Time Series Table

The results are seasonally adjusted.

National Indicies Jul
2018
Mar
2019
Apr
2019
May
2019
Jun
2019
Jul
2019
GDP-Weighted Index 54.5 51.8 51.7 53.2 52.9 54.1
Free-Weighted Index 54.1 51.7 51.5 52.0 52.5 52.1

BNZ – BusinessNZ PCI Time Series

July 2015 – July 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