Mixed results – PSI

13 Aug 2018

55.1

July

+2.4

Monthly Change

expanding

faster rate

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Kirk Hope

Chief Executive, BusinessNZ

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While New Zealand’s services sector experienced an increase in expansion levels during July, there were mixed results when looking beyond the main figure, according to the BNZ - BusinessNZ Performance of Services Index (PSI).

The PSI for July was 55.1, which was 2.4 points higher than June (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).  However, it did not show a full recovery from the sizeable drop in June.

BusinessNZ chief executive Kirk Hope said that while it was good to see overall expansionary levels not dropping further, there were still elements of the July result that gives pause for thought.

“Although the two key sub-indices of activity/sales (57.9) and new orders/business (60.1) recovered somewhat from June, the remaining three indicators remain sluggish, most notably employment (49.9) which technically fell into contraction for the first time since January 2013.  

In addition, the proportion of positive comments in July (53.8%) decreased from June (59.5%) and May (58.0%).  While some businesses noted new business opportunities, others equally noted a general slowdown and a quieter market for new customers." 

BNZ Senior Economist Doug Steel said that "the three month average has slipped to 54.9, which is the lowest it has been this year and lower than last year’s average of 56.9".

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Doug Steel's profile

Doug Steel

Senior Economist, BNZ

Boing

The Performance of Services Index (PSI) has bounced firmly in July, from a sharp lurch lower in June. This is good to see, especially in the context of a further weakening last week in its sister survey for the manufacturing sector (PMI).
Read more

Glass Half Full

Despite the signs of slowing growth above, it is important to recognise that the PSI is not outright weak. Indeed, at 55.1 it sits above its long term average of 54.5.
Read more

Industries Mixed

PSI industry performance was mixed in July, albeit with more positives than negatives. There was ongoing strength in accommodation, cafes, and restaurants that ties in with the persistent growth in tourist numbers we have witnessed as well as a good start to the ski season.
Read more

Employment Flat

Employment was one genuinely softer spot in the PSI, coming in at 49.9 essentially unchanged from June’s 50.0.
Read more

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National IndiciesJul
2017
Mar
2018
Apr
2018
May
2018
Jun
2018
Jul
2018
BNZ - BusinessNZ PSI 56.358.755.757.052.755.1
Activity/Sales 55.464.756.358.154.957.9
Employment54.850.751.553.150.049.9
New Orders/Business60.663.660.764.058.560.1
Stocks/Inventories53.155.351.754.250.751.0
Supplier Deliveries52.555.450.953.048.150.6

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

January 2012 – July 2018

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
3 Aug 2018

54.0

International PSI

BNZ - BusinessNZ PCI

54.8

GDP-Weighted Index

54.0

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 improvement in expansion during July.

The July GDP-Weighted Index (54.8) increased 2.1 points from the previous month, while the Free-Weighted Index (54.0) rose 0.7 points.  The stronger increase in the former was due to a part recovery in the services sector, while an improvement in the latter was brought back by lower expansion in the manufacturing sector.

PCI Time Series Table

The results are seasonally adjusted.

National IndiciesJul
2017
Mar
2018
Apr
2018
May
2018
Jun
2018
Jul
2018
GDP-Weighted Index 56.457.555.756.752.754.8
Free-Weighted Index56.655.856.756.353.354.0

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

January 2013 – July 2018

PCI Time Series Graph