New Zealand’s services sector ended the year on a low point, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
The PSI for December was 51.9, which was 1 point down from November (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). The December result was also the lowest level of expansion since September 2012, and well below the long term average of 54.4 for the survey.
BusinessNZ chief executive Kirk Hope said that despite the sector not falling into contraction at any stage during 2019, the weak December result was a disappointing end to the year.
“The headline PSI figure averaged 53.8 over 2019, which was below the 54.9 experienced in 2018 and well below the 57.0 mark for 2017. The fact that new orders, which is one of the key sub-index values has now recorded consecutive low expansion values not seen since 2011 shows how much ground the sector needs to make up to get back on track.
BNZ Senior Economist Craig Ebert said that “December’s PSI unequivocally counsels caution for the time being. Indeed, combining the weak PSI with last week’s retreat in the PMI suggests the economy may be currently travelling at a sub-2% rate.”.