Lacking service – PSI

17 Sep 2018

53.2

August

-1.6

Monthly Change

expanding

slower rate

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Kirk Hope

Chief Executive, BusinessNZ

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New Zealand’s services sector continued to exhibit lower levels of expansion during August, according to the BNZ - BusinessNZ Performance of Services Index (PSI).

The PSI for August was 53.2, which was 1.6 points lower than July (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).  This was also below the long run average of 54.5 for the survey.

BusinessNZ chief executive Kirk Hope said that like its sister survey the PMI, the PSI is currently in lower expansion mode.

“Looking at the sub-indices, the two key ones involving activity/sales (53.8) and new orders/business (58.8) both decreased in August, with the former at its lowest point since February.  For the third month running, employment (49.9) remains stubbornly stuck on a figure that represents all but no change, while stocks/inventories (51.8) showed some improvement from July.

On a positive note, the proportion of positive comments in August (56.0%) recovered somewhat from the decrease in July (53.8%)." 

BNZ Senior Economist Doug Steel said that "the PSI now sits below its long term average of 54.5. But it is more than one month, the trend has slowed. Indeed, the three month moving average has eased to 53.6, well below last year’s average of 57.1 and its lowest level in more than five years.".

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Doug Steel's profile

Doug Steel

Senior Economist, BNZ

Slower Progress

The service sector continues to put one foot in front of the other, but there is a clear sense that the rate of progress has slowed down over recent months. August’s Performance of Services Index (PSI) easing to 53.2 from July’s 54.8 fits this narrative.
Read more

Sales, Orders Mixed; Employment Flat

Despite the generally subdued survey results, there are some positives. New orders remain robust at 58.8, even a whisker above average and still in touch with July’s 60.0 result. It offers some hope for improvement in the current activity/sales index that wilted to a below average 53.8.
Read more

Housing and Retail

Indicators of the housing market and spending have been mixed of late. August’s REINZ housing report, with its varied regional performance, is a case in point. Overall, NZ house sales were 3.1% higher than a year ago, but that is flattered by last year’s softer patch heading into the election.
Read more

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National IndiciesAug
2017
Apr
2018
May
2018
Jun
2018
Jul
2018
Aug
2018
BNZ - BusinessNZ PSI 57.155.756.952.854.853.2
Activity/Sales 63.356.257.954.757.753.8
Employment52.151.153.149.949.949.9
New Orders/Business62.660.864.058.560.058.8
Stocks/Inventories52.751.754.350.751.051.8
Supplier Deliveries51.651.053.148.251.052.3

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

January 2012 – August 2018

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
6 Sep 2018

53.5

International PSI

BNZ - BusinessNZ PCI

53.2

GDP-Weighted Index

53.1

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 both display lower expansion during August.

The August GDP-Weighted Index (53.2) decreased 1.3 points from July, while the Free-Weighted Index (53.1) fell 0.7 points.  Given both surveys the results come from showed lower expansion in August, the lower levels for both was not unexpected in the current climate.

PCI Time Series Table

The results are seasonally adjusted.

National IndiciesAug
2017
Apr
2018
May
2018
Jun
2018
Jul
2018
Aug
2018
GDP-Weighted Index 57.455.756.752.954.553.2
Free-Weighted Index58.056.756.253.353.853.1

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

January 2013 – August 2018

PCI Time Series Graph