Soft service – PSI

15 Oct 2018

53.9

September

+0.6

Monthly Change

expanding

faster rate

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Kirk Hope

Chief Executive, BusinessNZ

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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".

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Craig Ebert's profile

Craig Ebert

Senior Economist, BNZ

The PSI

The service sector’s rate of expansion has definitely slowed over the last six months or so. However, it is also showing signs of stabilising close to a trend-like pace.
Read more

QSBO Services

There were also pockets of caution in the services component of the latest NZIER Quarterly Survey of Business Opinion (QSBO), although the sector’s broader messages were of resilience. The concerns appeared to be more about immediate history than the way forth.
Read more

GDP Implication

As it turned out, the services sector was important in underpinning the 1.0% gain we saw in Q2 GDP (when other elements of GDP were hit by timing issues). And services remain important for achieving the GDP growth we expect over H2 2018, especially in light of the fiscal stimulus that’s been coming the way of NZ households since 1 July.
Read more

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National IndiciesSep
2017
May
2018
Jun
2018
Jul
2018
Aug
2018
Sep
2018
BNZ - BusinessNZ PSI 56.356.852.854.953.353.9
Activity/Sales 56.757.954.857.853.956.1
Employment53.153.149.949.949.949.4
New Orders/Business61.263.958.359.858.656.1
Stocks/Inventories52.554.350.851.252.053.8
Supplier Deliveries53.753.148.251.152.552.3

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

January 2012 – September 2018

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
3 Oct 2018

53.0

International PSI

BNZ - BusinessNZ PCI

53.6

GDP-Weighted Index

52.9

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 displaying contrasting results during September.

The September GDP-Weighted Index (53.6) increased 0.3 points from August, while the Free-Weighted Index (52.9) fell a further 0.2 points.  The fact that the services sector displayed a slight improvement in expansion meant the former also showed an upswing in activity levels during September.

PCI Time Series Table

The results are seasonally adjusted.

National IndiciesSep
2017
May
2018
Jun
2018
Jul
2018
Aug
2018
Sep
2018
GDP-Weighted Index 56.456.652.954.553.353.6
Free-Weighted Index56.956.253.353.853.152.9

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

January 2013 – September 2018

PCI Time Series Graph