Softening service – PSI

15 Jul 2019

52.7

June

-0.8

Monthly Change

expanding

slower rate

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Kirk Hope

Chief Executive,

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Activity in New Zealand’s services sector softened in June, according to the BNZ - BusinessNZ Performance of Services Index (PSI).

The PSI for June was 52.7, which was 0.8 points down from May, and close to activity levels last seen in March (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).  The June result remained below the long term average of 54.4 for the survey.

BusinessNZ chief executive Kirk Hope said that the pick-up in May couldn't be sustained, and symptomatic of a lacklustre first half of 2019 for the sector.

"The first 6 months of 2019 represented the lowest overall average activity result for that timeframe since late 2012/early 2013.  While the index has yet to get very close to the no change mark of 50, nor has it shown any signs of building momentum to pick up pace.  

"New orders/business (54.8) continued it slowly slide to its lowest level since September 2012.  Employment (50.9) has managed to again only just keep its head above water, while supplier deliveries (49.4) again fell back into contraction.

Looking at comments from respondents, the proportion of positive comments for June (49.0%) took a hit from May (56.6%), although not as low as April (43.9%).  

BNZ Senior Economist Craig Ebert said that "the PSI still paints a picture of slow-running GDP growth for the meantime. This is reinforced by New Zealand’s PMI having dipped below trend over recent months too".

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Craig Ebert's profile

Craig Ebert

Senior Economist, BNZ

The PSI

Could the slowdown in New Zealand’s services sector growth be stabilising already? Admittedly, it’s not obvious from June’s Performance of Services Index (PSI). In fact, this eased to a seasonally adjusted 52.7, from the 53.5 level it wriggled up to in May.
Read more

QSBO

More generally, however, it’s hard to tell whether the slowdown in the services sector has largely done its dash for now. Caution was certainly the message from the NZIER’s latest Quarterly Survey of Business Opinion (QSBO).
Read more

Investment/Capacity

In spite of patchy-looking output and profitability, services firms in the latest QSBO remained relatively positive in their hiring intent.
Read more

GDP

Signs of stability in the PSI over last few months – after trend dissipation over last twelve – have obviously been good to see.  That said, the PSI still paints a picture of slow-running GDP growth for the meantime.
Read more

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National IndiciesJun
2018
Feb
2019
Mar
2019
Apr
2019
May
2019
Jun
2019
BNZ - BusinessNZ PSI 53.053.652.552.053.552.7
Activity/Sales 54.453.352.751.554.954.7
Employment50.151.651.148.450.650.9
New Orders/Business58.259.155.155.155.854.8
Stocks/Inventories49.949.550.148.956.953.3
Supplier Deliveries49.650.050.751.451.449.4

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

July 2014 – June 2019

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
3 Jul 2019

51.9

International PSI

BNZ - BusinessNZ PCI

52.4

GDP-Weighted Index

52.4

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 showing contrasting results in June.

The June GDP-Weighted Index (52.4) decreased 0.7 points from May, while the Free-Weighted Index (52.4) increased 0.4 points.

PCI Time Series Table

The results are seasonally adjusted.

National IndiciesJun
2018
Feb
2019
Mar
2019
Apr
2019
May
2019
Jun
2019
GDP-Weighted Index 52.853.751.951.853.152.4
Free-Weighted Index53.254.151.751.552.052.4

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

July 2014 – June 2019

PCI Time Series Graph