Seasonal adjustment – PSI

16 Jul 2018

52.8

June

-4.3

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 decrease in expansion levels during June, according to the BNZ - BusinessNZ Performance of Services Index (PSI).

The PSI for June was 52.8, which was 4.3 points lower than May (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).  It was also the lowest level of expansion since December 2012.

BusinessNZ chief executive Kirk Hope said that the components that make up the overall PSI result all experienced a noticeable drop in expansion levels.
“The key sub-indexes of activity/sales (54.7) and new orders/business (58.6) slowed in June, with the latter recording its lowest figure since April 2017.  In addition, employment (50.0) was at the no change level, and the lowest result since January 2013.

Interestingly, the proportion of positive comments in June (59.5%) was slightly up on May (58.0%), although given the sector is still showing expansion a swing to negative comments dominating would have been surprising.  All up, a PSI result that is at its lowest level for around five and a half years means the next few months will be watched closely for further signs of a slowdown". 

BNZ Senior Economist Doug Steel said that "while some have discounted weak business confidence readings of late, the PSI and PMI results are not so easily dismissed as these are surveys of business outcomes not based on sentiment, outlooks, or expectations. In this sense, they are arguably more worrying from a growth perspective".

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Doug Steel's profile

Doug Steel

Senior Economist, BNZ

Stumble

There was so much to like in May’s Performance of Services Index (PSI). Fast forward a month and there now seems much to fret about.
Read more

Growth Warning Signal?

May strength followed by June weakness could just be monthly noise rather than a pointer to a sustained period of slower growth. But we are wary of dismissing June’s weakness out of hand, given the PSI is not usually that volatile and the weaker result echoes last week’s softer Performance of Manufacturing Index (PMI).
Read more

Pockets of Strength

The general weakness in June’s PSI is seen in seven of the ten industry groups recording a lower reading this year compared to last. But there were some pockets of strength.
Read more

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National IndiciesJune
2017
Feb
2018
Mar
2018
Apr
2018
May
2018
June
2018
BNZ - BusinessNZ PSI 58.455.258.755.757.152.8
Activity/Sales 59.753.764.856.257.954.7
Employment53.950.850.751.553.050.0
New Orders/Business64.460.963.660.864.158.6
Stocks/Inventories55.454.355.451.854.450.9
Supplier Deliveries57.754.555.551.053.148.3

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

January 2012 – June 2018

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
5 Jul 2018

54.6

International PSI

BNZ - BusinessNZ PCI

52.7

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 a decrease in expansion during June.

The June GDP-Weighted Index (52.7) decreased 4.2 points from the previous month, while the Free-Weighted Index (53.1) fell 3.4 points.  The decrease in both was expected given the services and manufacturing sectors both displayed lower expansion during June.

PCI Time Series Table

The results are seasonally adjusted.

National IndiciesJun
2017
Feb
2018
Mar
2018
Apr
2018
May
2018
June
2018
GDP-Weighted Index 58.055.157.655.856.952.7
Free-Weighted Index57.554.755.856.956.553.1

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

January 2013 – June 2018

PCI Time Series Graph