Negative November – PSI 14 Dec 2020 46.7November-4.1Monthly Changecontractingpreviously expanding Kirk Hope Chief Executive, BusinessNZ View profile Activity in New Zealand’s services sector fell back into contraction during November, according to the BNZ - BusinessNZ Performance of Services Index (PSI).The PSI for November was 46.7, which was down 4.1 points from October (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). This was the lowest level of activity since May 2020. BusinessNZ chief executive Kirk Hope said that the drop in activity was disappointing to see, but symptomatic of how COVID-19 has caused significant disruption throughout most of 2020."Almost all of the sub-indices were in contraction during November. Activity/Sales (45.5) went further in contraction from last month, while New Orders/Business (52.6) experienced lower expansion levels. Employment (49.1) remained in contraction for the 9th consecutive month, while logistical disruptions continued to be evident with Supplier Deliveries (39.8) at its lowest since April 2020."BNZ Senior Economist Craig Ebert said that "the PSI's 3-month running average was below the 50 breakeven level in November, with a reading of 49.2. This paints a picture of momentum lost, after a couple of months of solid rebound in June and July." View the PSI Time Series Data Main Indicies Regional Results Craig EbertSenior Economist, BNZ The PSIThe caution we touched on last month has taken on extra meaning, with November’s Performance of Services Index (PSI) slipping to 46.7, from 50.8 in October. Indeed, it was an even weaker result than back in August, when Auckland went back into level-3 lockdown and the rest of the country level 2.Read moreDevil in the DetailsWith this, it’s natural to ask…what’s behind the weakness? By major component we would note the exaggerated weakest in Supplier Deliveries, with a seasonally adjusted reading of 39.8 (11.4 points below its long-term average).Read moreOther detailsDelving further into the PSI details and one runs into the fact that many of the sub-indices are not seasonally adjusted. This is especially important for November, as this is when seasonality in the PSI peaks; when its headline index is typically flattered by 4 points, just because of the time of year.Read moreOther signs of a slower NovemberWith the contractionary undertones in the latest PSI, we will remain on guard for other signs of slowing momentum (after what’s expected to be a chunky rebound in Q3 GDP, due Thursday).Read more View the BNZ Services Landscape PSI Time Series TableThe results are seasonally adjusted. National IndiciesNov2019Jul2020Aug2020Sep2020Oct2020Nov2020 BNZ - BusinessNZ PSI 53.054.447.250.150.846.7 Activity/Sales 53.255.445.652.449.845.5 Employment50.749.547.649.049.649.1 New Orders/Business54.055.447.955.057.552.6 Stocks/Inventories59.255.548.544.751.845.2 Supplier Deliveries54.356.945.142.943.839.8 View the PSI Time Series Data BNZ - BusinessNZ PSI Time SeriesJuly 2014 – November 2020 International ResultsJ.P. Morgan Global Manufacturing PSITM 3 Dec 202052.2 47.8GDP-Weighted Index50.8Free-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 show mixed results during November.The November GDP-Weighted Index (47.8) decreased 3.2 points from October. The Free-Weighted Index (50.8) decreased 0.8 points, although still remained in expansion. PCI Time Series TableThe results are seasonally adjusted. National IndicesNov2019Jul2020Aug2020Sep2020Oct2020Nov2020 GDP-Weighted Index 52.655.147.850.651.047.8 Free-Weighted Index51.557.149.152.151.650.8 View the PCI Time Series Data BNZ - BusinessNZ PCI Time Series July 2014 – November 2020 In this section Surveys & Statistics Performance of Manufacturing Index Performance of Services Index Compliance Cost Survey Exporters Survey Southern Cross Health Society - BusinessNZ Wellness in the Workplace Survey Reports & Publications BusinessNZ Planning Forecast International Guides & Tools BNZ - BusinessNZ PSI Time Series Data View seasonally adjusted and unadjusted time series data for the BNZ - BusinessNZ PSI BNZ - BusinessNZ PCI Time Series Data View seasonally adjusted and unadjusted time series data for the BNZ - BusinessNZ combined PMI & PSI. 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. View website Media Comment For media comment, please contact: Kirk Hope, 04 496 6560 Craig Ebert, BNZ 04 474 6799 Technical Comment For more information or assistance with data interpretation, please contact: Steve Summers 04 496 6564 ssummers@businessnz.org.nz Our ContributorsThe BNZ - BusinessNZ PSI contains data obtained through BusinessNZ's regional organisations About the PSIThe 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.About the PCIThe 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. Related Articles RMA shakeup long overdue Softening in September – PSI Spring is in the air Smooth operator – PSI Easing expansion – PSI View more