Path to improvement – PSI

18 Nov 2019

55.4

October

+0.9

Monthly Change

expanding

faster rate

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Kirk Hope

Chief Executive,

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Expansion in New Zealand’s services sector climbed above its long term average level of activity, according to the BNZ - BusinessNZ Performance of Services Index (PSI).

The PSI for October was 55.4, which was 0.9 points up from September (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).  The October result was also exactly one point above the long term average of 54.4 for the survey.

BusinessNZ chief executive Kirk Hope said that after three months at the 54 point mark, it was pleasing to see the sector push through to its highest result since January this year.

"Looking at the key sub-index values, both new orders/business (62.1) and activity/sales (58.1) improved their result since January 2019 and May 2018 respectively, with the former showing strong expansion.  Employment (52.0) fell marginally, while stocks/inventories (51.3) remained all but unchanged from the previous month.

Looking at comments from respondents, the lift in overall expansion was mirrored in the proportion of positive comments that went from 48.6% in September to 50.7% in October.

BNZ Senior Economist Craig Ebert said that "the firming in the PSI has been complemented by a sharp recovery in the Performance of Manufacturing Index (PMI) for October. Between the two of them, they now indicate annual GDP growth of closer to 2% than the 1% they portrayed just months ago".

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Craig Ebert's profile

Craig Ebert

Senior Economist, BNZ

The PSI

New Zealand’s services sector continues to shake off a mid-year slow patch. That’s according to the latest Performance of Services Index (PSI) anyway. It firmed up to a seasonally adjusted 55.4 in October – a point above its long-term average.
Read more

GDP

The firming in the PSI has been complemented by a sharp recovery in the Performance of Manufacturing Index (PMI) for October. Between the two of them, they now indicate annual GDP growth of closer to 2% than the 1% they portrayed just months ago.
Read more

Spending

The industry detail in October’s PSI added to the feeling of fortitude. Not so much for a common pulse of expansion across all industries; there wasn’t.
Read more

Housing

Certainly, there is potential for household spending to be given a boost by house price inflation, which is surely picking up. Last week’s Real Estate Institute figures showed annual house price inflation strengthening to 3.9% nationally, and to 8.2% outside of Auckland.
Read more

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National IndiciesOct
2018
Jun
2019
Jul
2019
Aug
2019
Sep
2019
Oct
2019
BNZ - BusinessNZ PSI 55.053.154.954.754.555.4
Activity/Sales 57.055.157.356.254.558.1
Employment53.751.151.953.652.652.0
New Orders/Business58.055.658.557.159.562.1
Stocks/Inventories52.553.654.353.351.251.3
Supplier Deliveries51.449.748.951.650.449.5

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

July 2014 – October 2019

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
6 Nov 2019

51.0

International PSI

BNZ - BusinessNZ PCI

55.1

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 (55.1) increased 1.3 points from September, while the Free-Weighted Index (54.5) rose 2.3 points. The fact that both the manufacturing and services sectors displayed higher levels of activity in October caused the two options to measure the PCI to rise.

PCI Time Series Table

The results are seasonally adjusted.

National IndiciesOct
2018
Jun
2019
Jul
2019
Aug
2019
Sep
2019
Oct
2019
GDP-Weighted Index 54.852.854.154.053.855.1
Free-Weighted Index54.352.552.152.052.254.5

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

July 2014 – October 2019

PCI Time Series Graph