New Zealand’s services sector experienced a decrease in expansion levels during November, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
The PSI for November was 53.5, which was 1.9 points lower than October (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining), and a return to levels of expansion last seen in August. It was also below the long term average of 54.5 for the survey.
BusinessNZ chief executive Kirk Hope said that the lower activity levels was due to a few factors.
“Although the sub-index of employment (54.7) was at its highest level since December 2017, activity/sales (53.6) returned to levels last experienced in February, while stock/inventories (50.7) dropped back to levels last seen in April 2017. New orders/business (57.3) still remained in healthy territory, although supplier deliveries (48.5) went into contraction, and the first time one of the sub-indexes produced a negative result for 5 months.
Despite the dip in expansion, the proportion of positive comments in November (60.1%) rose from October (56.5%) and September (50.7%). Xmas is playing a large part in activity, although there was also a number of comments around the end of year rush to complete projects”.
BNZ Senior Economist Doug Steel said that “overall, the latest PSI result adds to the evidence that growth in the service sector has settled at a slower pace over the past six months compared to what prevailed previously”.
