Easing expansion – PSI

15 Aug 2016

54.2

July

-2.2

Monthly Change

expanding

slower rate

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Kirk Hope

Chief Executive, BusinessNZ

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New Zealand's services sector experienced a dip in expansion levels during July, according to the BNZ - BusinessNZ Performance of Services Index (PSI).
 
The PSI for July was 54.2.  This was 2.2 points down from June, and the lowest value since November 2014 (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 despite the dip in expansion levels for July, the primary components involving activity/sales (57.3) and new orders/business (57.4) remained very healthy.
 
"Looking at comments, the proportion of positive comments actually increased from 59.3% in June to 65.6% in July.  Also, negative comments were strongly based around seasonal factors, with both the weather and school holidays mentioned numerous times.  
 
Regarding the latest PSI and PMI results, BNZ Senior Economist Doug Steel said "With July's PSI around about average, and the PMI holding above its norm, combined they suggest the economy is expanding at a rate around, or slightly above, trend. In numbers, this infers annual GDP growth circa 3%".

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
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Doug Steel

Senior Economist, BNZ

Slower Service

The Performance of Services Index (PSI) dropped a couple of points in July, to a seasonally adjusted 54.2 from 56.4 in June. July's result is the lowest since November 2014. Service sector growth seems to have slowed a bit from its recent strong run. It is something to note.
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GDP Implications

With July's PSI around about average, and the PMI holding above its norm, combined they suggest the economy is expanding at a rate around, or slightly above, trend. In numbers, this infers annual GDP growth circa 3%.
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Accommodating

One of the industries at the forefront of New Zealand's current GDP expansion is tourism. July's Accommodation Survey attested to this. International guest nights were 13.7% higher than their level of a year ago. This continued the pace we've seen the very start of the year.
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Retail Expenditure

July's PSI measured a bit of a slowing in its retail component (to an unadjusted index reading of 54.9). Nonetheless, it was still clearly expansive. And other indicators of retail spending remain positively upbeat.
Read more .

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National Indicies Jul
2015
Mar
2015
Apr
2016
May
2016
Jun
2016
Jul
2016
BNZ - BusinessNZ PSI 57.055.157.756.756.454.2
Activity/Sales 60.659.863.059.957.857.3
Employment53.753.053.854.454.853.8
New Orders/Business60.857.461.359.958.157.4
Stocks/Inventories52.252.552.552.353.251.1
Supplier Deliveries55.151.254.252.154.948.4

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

January 2012 – July 2016

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
3 Aug 2016

51.3

International PSI

BNZ - BusinessNZ PCI

54.5

GDP-Weighted Index

55.4

Free-Weighted 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 experience a dip in expansion from June to July.

The July GDP-Weighted Index (54.5) decreased 2.2 points from June, while the Free-Weighted Index (55.4) decreased 1.6 points. The lower GDP-Weighted result was mainly due to a lower PSI value for July.

PCI Time Series Table

The results are seasonally adjusted.

National Indicies Jul
2015
Mar
2016
Apr
2016
May
2016
Jun
2016
Jul
2016
GDP-Weighted Index 56.755.157.756.756.754.5
Free-Weighted Index56.255.157.257.457.055.4

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

January 2013 – 2016

PCI Time Series Graph