BNZ – BusinessNZ
Performance of
Services Index

Weakening of service sector activity continues in May – PSI

16 Jun, 2008

Activity in the service sector continues to be in a weak state, although a slight improvement on the previous month, according to the Bank of New Zealand – BusinessNZ Performance of Services Index (PSI).

The PSI for May stood at 49.1, and although was 0.2 points up from the previous month, was 9.4 points lower than the same time last year.  A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining. The average PSI value since the survey began is 55.7.

BusinessNZ chief executive Phil O’Reilly said the May result was a mixture of both positive and negative news.

“It was encouraging to see that the index had not shown a worse result than April, and that the Northern and Canterbury/Westland regions had improved to show minor expansion. In addition, some sub-sectors are continuing to show moderate growth. However, in contrast this was still the second lowest result recorded, and significantly down on the same time last year. Comments received from respondents clearly highlight the effects of the slowing economy as spending is down while costs are up.

“Looking at offshore developments, it is pleasing to see that the latest JPMorgan global PSI for May (52.4) showed slight acceleration in activity and new business picking up. While conditions remain soft offshore, a halt in the decline in overseas markets should provide a similar steady pattern of activity in New Zealand in the months ahead, he said.

Four of the five diffusion indices that make up the PSI exhibited some level of decline, with activity/sales (48.3) showing its first contraction. Employment (44.7) followed on from its decrease in March, while stocks/inventories (46.9) and supplier deliveries (47.8) also recorded some level of contraction. In contrast, new orders/business (55.3) picked up from March, but at that level still represents its second worst result.

Activity by region showed most near the ‘no change’ threshold. Both the Northern (50.8) and Canterbury/Westland (50.6) regions improved from April, while the Central region (50.5) continued to fall t0 its lowest level recorded. The Otago/Southland region (41.6) continued to experience a significant weakening, mainly due to ongoing falls in activity/sales.

The various service sectors were a mix of expansion and contraction during May. At one end, both the health & community services (56.8) and property & business services (56.1) displayed healthy growth in May. However, accommodation, cafes & restaurants (36.1) continued to fall, while retail trade (46.1) also experienced another decline in activity. Wholesale trade (51.2) bounced back from the April result to show some level of expansion.

Click here to view the April PSI & PCI
Click here to view the PSI time series data
Click here to view the PCI time series data

For media comment: Georgina Bond, 021 959 831

BNZ - BusinessNZ PSI

Time Series Data

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

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.

BNZ – BusinessNZ PSI Time Series

January 1966 – January 1970

International Results

J.P. Morgan Global Manufacturing PSITM

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

PCI Time Series Table

The results are seasonally adjusted.

BNZ – BusinessNZ PCI Time Series

January 1966 – January 1970

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