Slower pace – PSI

17 Dec 2018

53.5

November

-1.9

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 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".

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Doug Steel's profile

Doug Steel

Senior Economist, BNZ

Settling Slower

After pushing back above average in October, the Performance of Services Index (PSI) slipped back in November. In numbers, October’s 55.4 and November’s 53.5 oscillated around the series’ long term average of 54.5.
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Details

Slower activity/sales stood out on the softer side in November, with this sub index easing to 53.6 from 57.6 in October. Supplier deliveries were also weak, dipping below the 50 mark that delineates expansion from contraction.
Read more

GDP Implications

When they were released a few months ago, Q2 GDP figures revealed 1.0% growth in the quarter. The much more timely PSI (and PMI) indicators have long been suggesting that growth in the second half of the year has continued albeit slowed from Q2’s pace.
Read more

Employment Bastion

One PSI component showing undeniable strength in November was employment. This lifted to 54.7 adding to its previous strong gain to 53.7 in October, indicating a clear pick up in service sector employment growth has occurred early in the final quarter of the year.
Read more

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National IndiciesNov
2017
Jul
2018
Aug
2018
Sep
2018
Oct
2018
Nov
2018
BNZ - BusinessNZ PSI 56.754.953.454.155.453.5
Activity/Sales 60.957.853.956.157.653.6
Employment49.850.250.150.353.754.7
New Orders/Business60.859.758.656.358.257.3
Stocks/Inventories59.851.051.853.752.150.7
Supplier Deliveries53.950.952.452.150.948.5

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

January 2012 – November 2018

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
6 Dec 2018

53.7

International PSI

BNZ - BusinessNZ PCI

53.5

GDP-Weighted Index

53.8

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 decrease from the previous month.

The November GDP-Weighted Index (53.5) decreased 1.7 points from October, while the Free-Weighted Index (53.8) fell 0.9 points.  The fact that the services sector experienced a larger drop in expansion than the manufacturing sector meant the GDP-weighted index saw a larger fall.

PCI Time Series Table

The results are seasonally adjusted.

National IndiciesNov
2017
Jul
2018
Aug
2018
Sep
2018
Oct
2018
Nov
2018
GDP-Weighted Index 56.854.553.353.855.253.5
Free-Weighted Index57.553.853.253.254.753.8

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

January 2013 – November 2018

PCI Time Series Graph