New Zealand’s services sector experienced a slight increase in expansion during September, although still below its long run average, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
The PSI for September was 53.9, which was 0.6 points higher than August (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). However, it was still below the long run average of 54.5 for the survey.
BusinessNZ chief executive Kirk Hope said that while the slight pick-up in expansion was obviously welcome, the sub-index results still show some areas for concern.
“Looking at the two key sub-index results, while activity/sales (56.1) recovered somewhat from a sizeable drop in expansion during August, new orders/business (56.1) decreased to its lowest level since April 2017. Also, after three consecutive values at 49.9, employment (49.4) fell further into contraction to its lowest result since September 2012.
The proportion of positive comments in September (50.7%) also dropped by a fair margin compared with August (56.0%).”
BNZ Senior Economist Craig Ebert said that “generally speaking, the NZ PSI, much like the QSBO, suggests the services industry is settling down into a trend-like pace. However, there is a risk Q3 could be a bit bumpy regarding output and employment”.