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”.