Uptick in activity – PSI

19 Nov 2018

55.4

October

+1.2

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 second consecutive improvement in expansion levels, according to the BNZ - BusinessNZ Performance of Services Index (PSI).

The PSI for October was 55.4, which was 1.2 points higher than September (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).  It was also above the long term average of 54.5 for the survey.

BusinessNZ chief executive Kirk Hope said that the lift in October was due to the main sub-index values showing improvement.

“Activity/sales (57.8) returned to levels last experienced in July, while new orders/business (57.9) recovered somewhat after a drop in expansion levels the previous month.  Also, after four consecutive months around the no change/contraction level, employment (54.0) increased to its highest value since December 2017.

The proportion of positive comments in October (56.5%) was up on both September (50.7%) and August (56.0%), with a combination of comments centred on either business as usual or new business/clients".

BNZ Senior Economist Craig Ebert said that "it wasn’t just the PSI that improved in October.  So too did the month’s Performance of Manufacturing Index (PMI), overall. Combined, they were starting to form a picture, that any near-term slowdown in economic growth will likely be contained".

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Craig Ebert's profile

Craig Ebert

Senior Economist, BNZ

The PSI

Having been in slowdown mode for much of this year, New Zealand’s Performance of Services Index (PSI) showed signs of resilience in October. It lifted to a seasonally adjusted level of 55.4, a tad above its historical average (54.5).
Read more

Employment

Of the many positive aspects to October’s PSI it was hard to go past its employment index. This jumped to 54.0, from the 6-year low that was September (49.7).
Read more

GDP Implications

Of course, it wasn’t just the PSI that improved in October.  So too did the month’s Performance of Manufacturing Index (PMI), overall. Combined, they were starting to form a picture, that any near-term slowdown in economic growth will likely be contained.
Read more

Global

We finish this month’s missive with a word on the global economy. To be sure, there are signs that its growth is slowing, especially with eyes on Asia and Europe.
Read more

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National IndiciesOct
2017
Jun
2018
Jul
2018
Aug
2018
Sep
2018
Oct
2018
BNZ - BusinessNZ PSI 55.552.855.053.554.255.4
Activity/Sales 57.954.857.954.056.257.8
Employment50.849.949.950.049.754.0
New Orders/Business60.558.359.858.656.257.9
Stocks/Inventories51.550.851.252.053.852.2
Supplier Deliveries53.148.151.052.652.351.2

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

January 2012 – October 2018

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
6 Nov 2018

53.4

International PSI

BNZ - BusinessNZ PCI

55.2

GDP-Weighted Index

54.5

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 improve from the previous month.

The October GDP-Weighted Index (55.2) increased 1.4 points from September, while the Free-Weighted Index (54.5) rose 1.3 points.  The fact that both the manufacturing and services sectors showed higher expansion levels in October meant a lift for both measurements.

PCI Time Series Table

The results are seasonally adjusted.

National IndiciesOct
2017
Jun
2018
Jul
2018
Aug
2018
Sep
2018
Oct
2018
GDP-Weighted Index 55.852.954.553.353.855.2
Free-Weighted Index56.453.353.853.253.254.5

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

January 2013 – October 2018

PCI Time Series Graph