Holiday mode – PSI

22 Jan 2019

53.0

December

-0.4

Monthly Change

expanding

slower rate

View Kirk Hope's profile

Kirk Hope

Chief Executive, BusinessNZ

View profile

New Zealand’s services sector experienced a further dip in expansion levels during December, according to the BNZ - BusinessNZ Performance of Services Index (PSI).

The PSI for December was 53.0, which was 0.4 points down from November (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).  This was the lowest level of expansion since June, and meant the overall average rate for 2018 was 54.9.  This was lower than 2016/2017, but still slightly ahead of the long term average of 54.5 for the survey.

BusinessNZ chief executive Kirk Hope said that the December result was influenced by a few factors.

“Despite the sub-index of new orders (59.2) improving from November, the other key sub-index of activity/sales (52.2) continued to drop, reaching its lowest level of expansion since May 2014.  Employment (50.3) returned to levels experienced for a sizeable part of 2018, while supplier deliveries (51.6) returned to expansion.

The further dip in expansion also saw a drop in positive comments received, with the proportion of positive comments in December (54.4%) lower than both November (60.1%) and October (56.5%).  Both Xmas and holidays were the stand out reason for negative comments, although a number of positive comments also focused in this space". 

BNZ Senior Economist Doug Steel said that the recent PSI results "adds to the sense that growth in the service sector has been slower over the past six months. But it is also important to recognise that it appears to be stabilising at this slower pace rather than slowing further".

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Doug Steel's profile

Doug Steel

Senior Economist, BNZ

Patchy Service

Over recent years the service sector has been a pillar of economic strength. It has consistently been a source of strong positive contributions to overall economic growth.
Read more

Trading Day Distortions in December?

Indeed, December’s PSI has arguably held up very well in the face of possible trading day disruptions. As well as having just 19 regular business week days, December 2018 contained a couple of ‘orphan’ days.
Read more

Finding Staff a Major Challenge

The PSI employment index cooled to just above 50 in December after a couple of strong months.
Read more

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National IndiciesDec
2017
Aug
2018
Sep
2018
Oct
2018
Nov
2018
Dec
2018
BNZ - BusinessNZ PSI 56.153.554.155.353.453.0
Activity/Sales 58.653.856.057.453.452.2
Employment55.950.050.253.755.550.3
New Orders/Business60.258.656.358.257.559.2
Stocks/Inventories51.751.853.651.950.451.3
Supplier Deliveries50.252.452.251.048.651.6

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

January 2012 – December 2019

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
4 Jan 2019

53.1

International PSI

BNZ - BusinessNZ PCI

53.6

GDP-Weighted Index

54.9

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 improve during December.

The December GDP-Weighted Index (53.6) increased 0.1 points from November, while the Free-Weighted Index (54.9) rose 1.0 points.  The fact that the services sector experienced a drop in expansion while the manufacturing sector improved meant the Free-Weighted Index improved by a greater margin for the last month of the year.

PCI Time Series Table

The results are seasonally adjusted.

National IndiciesDec
2017
Aug
2018
Sep
2018
Oct
2018
Nov
2018
Dec
2018
GDP-Weighted Index 55.653.353.855.153.553.6
Free-Weighted Index53.853.253.354.753.954.9

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

January 2013 – December 2019

PCI Time Series Graph