BNZ – BusinessNZ
Performance of
Services Index

Winter touch – PSI

14 Aug, 2017
56.0
July
-2.3

Monthly Change

expanding
slower rate

New Zealand’s services sector remained in positive territory, despite winter having a negative effect on some businesses, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
 
The PSI for July was 56.0.  This was 2.3 points lower than June, and the lowest value since April (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, July’s main result was still clearly above the long-term average for the survey, and showing solid expansion. 
“Looking at comments from respondents, a number of negative comments centred on wet and wintery conditions hampering business activity, although almost 60% still outlined positive comments.”
 
BNZ Senior Economist Doug Steel said that “service sector growth cooled somewhat in July. The weather looks to have been, at least partly, to blame, as it was for the slight dip in the month’s Performance of Manufacturing Index (PMI) released last week”.

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

PSI Cools

The Performance of Services Index (PSI) eased a couple of points in July to 56.0 from 58.3 in June. This suggests service sector growth cooled somewhat in July. The weather looks to have been, at least partly, to blame, as it was for the slight dip in the month’s Performance of Manufacturing Index (PMI) released last week. Many respondents to the PSI survey noted extreme weather as having a negative impact on their business this month. Consistent with disrupted logistics, supplier deliveries slowed the most across the major components. Despite the disruption, the PSI remains above its long term average of 54.4 indicating solid growth.
Read more

Sales Growth Slows – Temporarily?

Sales growth slowed in July, with the index dipping to 55.5 from 59.0 in June. This is not as much of a slowdown as the 52.8 recorded in April, when cyclones caused havoc, but it is still a sizeable dip. Of course, it might not be all the weather’s doing. A cooling housing market, some election uncertainty, and an unwind from the Lions rugby tour are a few potential candidates for slower sales growth in the month. For now we are treating the slowing in sales growth as temporary, but await coming months’ data for confirmation. We are encouraged by new orders remaining very healthy at over 60 and employment ticking higher.
Read more

Jobs Strong

PSI employment rose to 55.2 in July from 54.2 in June. This follows a lift in PMI employment last week. The composite employment index has lifted sharply. On a smoothed three month average basis it remains near record levels. The mild Q2 dip recorded in the official employment figures always looked a bit odd in the context of other surveys showing an increase in filled jobs and paid hours, strong employment intentions and high job ads. Ongoing strength in the PSI and PMI employment indicators adds to the case of a decent bounce back in official employment in Q3.
Read more

Good Orders

PSI and PMI new orders eased in July, but both remain above their long term average. Recent strength in the composite new orders indicator bodes well for a pick-up in economic growth following a softer period at the end of last year and at the start of this year. On a smoothed three month average basis, the recent buoyancy in new orders even suggest some upside risk to our near term GDP forecasts. But all considered, including the slower sales indicators noted above, we’ll stick with our view that the economy will expand around 2.5% this year.
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 July
2016
Mar
2017
Apr
2017
May
2017
Jun
2017
Jul
2017
BNZ – BusinessNZ PSI 55.5 58.7 52.8 58.5 58.3 56.0
Activity/Sales 58.6 60.9 52.0 62.6 59.0 55.5
Employment 53.6 53.0 55.8 54.4 54.2 55.2
New Orders/Business 58.6 65.6 55.4 63.0 63.8 60.1
Stocks/Inventories 52.7 56.6 46.2 54.5 54.8 52.5
Supplier Deliveries 49.8 55.5 47.9 55.1 56.9 52.5

BNZ – BusinessNZ PSI Time Series

July 2013 – July 2017

International Results

J.P. Morgan Global Manufacturing PSITM

03 Aug 2017
53.7

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.

Technical Contact

Stephen Summers
Economist, BusinessNZ

[email protected]

PSI Releases

Path of expansion

New Zealand’s services sector continued its path of expansion in February, according to the BNZ – BusinessNZ Performance of Services Index (PSI). The PSI for February was 53.0 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below...

Green shoots?

New Zealand’s services sector climbed back into expansion for the start of 2024, according to the BNZ – BusinessNZ Performance of Services Index (PSI). The PSI for January was 52.1 (A PSI reading above 50.0 indicates that the service sector is generally expanding;...

Activity on holiday

New Zealand’s services sector fell back into contraction during December, according to the BNZ – BusinessNZ Performance of Services Index (PSI). The PSI for December was 48.8 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below...

Over the line

New Zealand’s services sector recorded expansion in November, according to the BNZ – BusinessNZ Performance of Services Index (PSI). The PSI for November was 51.2 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is...

Lost momentum

New Zealand’s services sector went back into contraction in October, according to the BNZ – BusinessNZ Performance of Services Index (PSI). The PSI for October was 48.9 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that...

BNZ – BusinessNZ
Performance of
Composite Index

55.8

GDP-Weighted Index

56.1

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 again both decrease in July.

The July GDP-Weighted Index (55.8) dropped 1.9 points from June, while the Free-Weighted Index (56.1) slipped 1.2 points.  The overall decrease in expansion levels for both the manufacturing and services sector led to both measures slipping in July.

PCI Time Series Table

The results are seasonally adjusted.

National Indicies Jul
2016
Mar
2017
Apr
2017
May
2017
Jun
2017
Jul
2017
GDP-Weighted Index 55.4 58.6 53.6 58.4 57.7 55.8
Free-Weighted Index 56.0 58.4 54.8 59.0 57.3 56.1

BNZ – BusinessNZ PCI Time Series

July 2013 – July 2017

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