BNZ – BusinessNZ
Performance of
Services Index

Steady service for now – PSI

16 Sep, 2019
54.6
August
-0.2

Monthly Change

expanding
slower rate

Expansion in New Zealand’s services sector dropped back marginally in August, according to the BNZ – BusinessNZ Performance of Services Index (PSI).

The PSI for August was 54.6, which was 0.2 points down from July (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).  The August result was also above the long term average of 54.4 for the survey.

BusinessNZ chief executive Kirk Hope said that despite the slight dip in expansion levels, the services sector has managed to remain above the long-term average for a second consecutive month.

“As pointed out last month, the jury is still out as to whether the August result for the PSI is the start of a genuine improvement going forward.  Given its sister survey the PMI remains in contraction and the average long-term difference in values between the two surveys is 2.4 points, the following months will provide a steer towards whether the gap closes in a positive or negative fashion.

Of the main sub-indexes, production (56.1) decreased 1.2 points, while new orders (56.8) fell 1.6 points.

Looking at comments from respondents, the proportion of positive comments for August (51.8%) improved from July (47.6%) and June (49.0%).   

BNZ Senior Economist Craig Ebert said that “we don’t believe the services sector is giving up the ghost. The PSI backs this up. Then again, it is important that this continues, to offset the tough times the manufacturing sector is getting mired in”.

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Kirk Hope

Kirk Hope

CEO, BusinessNZ

BNZ - BusinessNZ PSI

Time Series Data

View seasonally adjusted and unadjusted time series data for the BNZ - BusinessNZ PSI

Services Landscape

The PSI

New Zealand’s Performance of Services Index (PSI) continues to rumble along at a trend-like pace. Its August reading, of 54.6, was barely different to July’s 54.8 and, more to the point, was close to its long-term average of 54.4.
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Global Context

The firmness in the NZ PSI of late is all the more important, given the contractionary tone that is now infiltrating the Performance of Manufacturing Index (PMI). The latter printed at 48.4 in August. Yet it’s not a great surprise to see this split – of the PMI being quite weak compared to its PSI counterpart.
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GDP

In New Zealand’s case, the relatively robust PSI provides a key backstop to our near-term view on GDP growth. June quarter’s GDP is due for publication this coming Thursday.  While we expect it expanded 0.3% (undermined by falls in manufacturing, goods exports, and business investment), the services part of Q2 GDP we reckon increased about 0.6%.
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Consumer Spending

Of course, data on services industry activity in New Zealand – outside of the GDP accounts – is not exactly munificent.  However, we do have the monthly electronic card transaction values to go by, with respect to retail-type spending.
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View full BNZ Services Snapshot
Craig Ebert

Craig Ebert

Senior Economist, BNZ

Sponsor Statement

BNZ is delighted to be associated with the Performance of Services Index (PSI) and BusinessNZ.

This association brings together the significant experience of leading business advocacy body BusinessNZ, and business finance specialist BNZ.

We look forward to continuing our association with BusinessNZ and associated regional organisations, and to playing our part in the ongoing development of the New Zealand service sector.

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PSI Time Series Table

The results are seasonally adjusted.

National Indicies Aug
2018		 Apr
2019		 May
2019		 Jun
2019		 Jul
2019		 Aug
2019
BNZ – BusinessNZ PSI 53.3 52.1 53.7 53.1 54.8 54.6
Activity/Sales 53.4 51.8 55.1 55.1 57.3 56.1
Employment 49.7 48.7 51.1 51.1 52.0 53.4
New Orders/Business 59.0 55.1 56.1 55.3 58.4 56.8
Stocks/Inventories 51.5 49.2 56.8 53.7 54.4 53.6
Supplier Deliveries 51.7 51.3 51.4 49.7 48.9 51.6
View the Time Series Data

BNZ – BusinessNZ PSI Time Series

August 2015 – August 2019

International Results

J.P. Morgan Global Manufacturing PSITM

05 Sep 2019
51.8

About the PSI

The BNZ – BusinessNZ Performance of Services Index is a monthly survey of the service sector providing an early indicator of activity levels.

A PSI reading above 50 points indicates service activity is expanding; below 50 indicates it is contracting.

The main PSI and sub-index results are seasonally adjusted.

Technical Contact

Stephen Summers
Economist, BusinessNZ

[email protected]

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View all PSI releases

BNZ – BusinessNZ
Performance of
Composite Index

54.0

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 both decrease in August.

The August GDP-Weighted Index (54.0) decreased 0.2 points from July, while the Free-Weighted Index (51.9) also fell by the same margin.

PCI Time Series Table

The results are seasonally adjusted.

National Indicies Aug
2018		 Apr
2019		 May
2019		 Jun
2019		 Jul
2019		 Aug
2019
GDP-Weighted Index 53.4 51.7 53.2 52.9 54.2 54.0
Free-Weighted Index 53.5 51.5 52.0 52.5 52.1 51.9
View the Time Series Data

BNZ – BusinessNZ PCI Time Series

August 2015 – August 2019

About the PCI

The BNZ – BusinessNZ Performance of Composite Index (PCI) takes into account results from both the Performance of Manufacturing Index (PMI) and the Performance of Services Index (PSI). Combined results are shown in two ways:

GDP-Weighted Index:
Apportions the weight of the manufacturing and services index within the economy to produce an overall result.

Free-Weighted Index:
Combines data from both indexes to produce an overall result.

Both time series for the PCI are then seasonally adjusted.

BNZ - BusinessNZ PCI

Time Series Data

View seasonally adjusted and unadjusted time series data for the BNZ - BusinessNZ PCI

Our Contributors

The BNZ – BusinessNZ PSI contains data obtained through BusinessNZ’s regional organisations