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.”