Catch up – PSI

17 Jun 2019

53.6

May

+1.6

Monthly Change

expanding

faster rate

View Kirk Hope's profile

Kirk Hope

Chief Executive,

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Activity in New Zealand’s services sector picked up after three consecutive monthly falls in expansion, according to the BNZ - BusinessNZ Performance of Services Index (PSI).

The PSI for May was 53.6, which was 1.6 points up from April, and a return to levels of activity seen in February (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).  However, the May result was still below the long term average of 54.4 for the survey.

BusinessNZ chief executive Kirk Hope said that while the pick-up in activity is a positive step, further expansion in the coming months will be dependent on a few factors.

"New orders/business (55.7) has remained around that level for the last three months, which is below the long-term average of 58.6.  Given this sub-index feeds through into activity/sales and employment, a lift in this space would need to take place to improve the overall result.

Looking at comments from respondents, the proportion of positive comments for May (56.6%) recovered from April (43.9%), and was similar to March (55.8%).  A sustained improvement in the overall result would also require a consistent proportion of respondents noting positive influences on their business activity".

BNZ Senior Economist Craig Ebert said that "overall, the results paint a picture of a slowing economy, which might struggle to live up to most forecasters’ GDP growth forecasts".

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Craig Ebert's profile

Craig Ebert

Senior Economist, BNZ

PSI

As we noted last month, “unless there is a sizable bounce in May’s PSI we’ll be left with the distinct impression of a slowing services sector”. Well, there was a bounce, with the Performance of Services Index up to 53.6, from the 52.0 level it dipped to in April. However, it was hardly sizable.
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Detail

Then again, the slowness in the PSI does not appear steeped across all parts. For example, Otago/Southland stood out as a regional weak spot, with an unadjusted index of 46.5 in May (and a 3-month average of 47.9).
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Services GDP

Overall, however, May’s PSI does tend to affirm the impression of a slowing services sector, rather than instilling confidence that another pick-up is afoot. We are certainly guarded with respect to how services go in this week’s Q1 GDP report.
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Overall GDP

While the bounce in May’s PSI wasn’t convincing it was definitely timely – given the stall we saw in the Performance of Manufacturing Index in the month (to 50.2, from 52.7).
Read more

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National IndiciesMay
2018
Jan
2019
Feb
2019
Mar
2019
Apr
2019
May
2019
BNZ - BusinessNZ PSI 56.356.453.652.552.053.6
Activity/Sales 57.261.653.352.651.454.7
Employment52.652.651.551.148.450.6
New Orders/Business63.160.659.155.055.155.7
Stocks/Inventories53.749.849.349.848.556.8
Supplier Deliveries52.952.150.250.951.751.7

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

July 2014 – May 2019

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
5 Jun 2019

51.6

International PSI

BNZ - BusinessNZ PCI

53.1

GDP-Weighted Index

51.8

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 improve during May.

The May GDP-Weighted Index (53.1) rose 1.3 points from April, while the Free-Weighted Index (51.8) increased 0.4 points.  A lift in expansion levels for the services sectors meant there was a larger increase in the GDP-Weighted Index.

PCI Time Series Table

The results are seasonally adjusted.

National IndiciesMay
2018
Jan
2019
Feb
2019
Mar
2019
Apr
2019
May
2019
GDP-Weighted Index 56.056.253.751.951.853.1
Free-Weighted Index55.755.054.151.751.451.8

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

July 2014 – May 2019

PCI Time Series Graph