Slipping service – PSI

15 Apr 2019

52.9

March

-0.7

Monthly Change

expanding

slower rate

View Kirk Hope's profile

Kirk Hope

Chief Executive,

View profile

Activity in New Zealand’s services sector slipped to its lowest level since 2012, according to the BNZ - BusinessNZ Performance of Services Index (PSI).

The PSI for March was 52.9, which was 0.7 points down from February, and follows a drop of 2.7 points for the previous month (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).  The March result was the lowest since December 2012, and below the long term average of 54.5 for the survey.

BusinessNZ chief executive Kirk Hope said that there were a couple of concerning elements that contributed to the easing off of service sector activity for March.

“New orders/business (54.9), which is a key component to overall activity, dropped to its lowest point since September 2012. Activity/sales (52.5) also slipped further, so all eyes will be on these key results in the months ahead to ascertain whether expansion continues its downward trend.

On the positive side, the proportion of positive comments for March (55.8%) was up on February (52.4%) and January (54.0%).  However, many felt it was either business as usual or a general feeling of uncertainty with the current economy".

BNZ Senior Economist Doug Steel said "the PSI trends remain ok, but a slower March reading heightens focus on the next few months to see if the slower pace is transitory or not".

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Doug Steel's profile

Doug Steel

Senior Economist, BNZ

Slower Service

The Performance of Services Index (PSI) eased a touch in March, to 52.9 from 53.6 in February. Not a big move in and of itself, but it does take the index to its lowest point since 2012 and a bit further below its long term average of 54.5.
Read more

Caveats

But, as always, we caution against over-reacting to one month’s data especially when there are events that might generate results that are not representative of the trend.
Read more

Trends OK

At this point, the trends remain steady with the PSI three month moving average steady at 54.3 extending a period of broad stability in this measure to eight months. But, by the same token, we should not dismiss the softer March reading out of hand as it coincides with some slower indicators for housing and tourism.
Read more

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National IndiciesMar
2018
Nov
2018
Dec
2018
Jan
2019
Feb
2019
Mar
2019
BNZ - BusinessNZ PSI 59.453.453.056.353.652.9
Activity/Sales 64.853.352.261.653.452.5
Employment50.755.450.552.651.850.9
New Orders/Business64.557.859.460.659.254.9
Stocks/Inventories54.450.351.250.049.349.8
Supplier Deliveries55.148.751.851.950.050.8

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

July 2014 – March 2019

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
3 Apr 2019

53.7

International PSI

BNZ - BusinessNZ PCI

52.0

GDP-Weighted Index

51.9

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 again both decrease in expansion levels during March.

The March GDP-Weighted Index (52.0) decreased 1.7 points from February, while the Free-Weighted Index (51.9) decreased 2.3 points.  A decrease in expansion levels for both sectors meant there was only direction these were going to go during March.

PCI Time Series Table

The results are seasonally adjusted.

National IndiciesMar
2018
Nov
2018
Dec
2018
Jan
2019
Feb
2019
Mar
2019
GDP-Weighted Index 57.953.653.656.053.752.0
Free-Weighted Index56.353.954.855.054.251.9

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

July 2014 – March 2019

PCI Time Series Graph