Service with a smile – PSI

17 Feb 2020

57.1

January

+5.0

Monthly Change

expanding

faster rate

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Kirk Hope

Chief Executive,

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New Zealand’s services sector started the year on a pleasing note, according to the BNZ - BusinessNZ Performance of Services Index (PSI).

The PSI for January was 57.1, which was 5 points up from December (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). The January result was also the highest level of expansion since March 2018, and clear above the long term average of 54.4 for the survey.

BusinessNZ chief executive Kirk Hope said that the pick-up in activity for the first month of 2020 was welcome after a lacklustre 2019.

"The key drivers of the January result was a combination of new orders (62.8) getting back over the 60-point mark, as well as activity/sales (57.0) lifting to its highest level since January 2019. Supplier deliveries (56.5) also saw its strongest result since June 2017."

"Any continuation of January's result in the months ahead will depend on new business opportunities and consistent sales to drive activity further."

BNZ Senior Economist Doug Steel said that "for now, January’s glowing PSI report fits with the rather upbeat view of the economy expressed by the Reserve Bank last week. In the least, it helps offset a still soft looking PMI. Regardless, the near term outlook heavily depends on how much – and for how long – disruption occurs as a result of local weather conditions and COVID-19".

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Doug Steel's profile

Doug Steel

Senior Economist, BNZ

Happy New Year!

We thought it was probably too early for any impact from COVID-19 and policy response to it to materially show up in the January Performance of Services Index (PSI). After all, general awareness of the virus didn’t really ramp up until very late in the month.
Read more

Positives Abound

This puts the PSI firmly above its long term average of 54.4, having been wallowing a bit below it late last year. The details oozed strength too.
Read more

Near Term Caution

But for all the strength in January’s survey, one has to remain a little cautious on what is happening underfoot. For a start, and most obviously, parts of the service sector can be expected to take a hit from COVID-19 and responses to it, at least in the short term.
Read more

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National IndiciesJan
2019
Sep
2019
Oct
2019
Nov
2019
Dec
2019
Jan
2020
BNZ - BusinessNZ PSI 55.454.555.353.252.157.1
Activity/Sales 61.254.457.954.152.857.0
Employment52.352.651.551.652.452.8
New Orders/Business58.759.362.253.655.262.8
Stocks/Inventories48.751.451.558.652.057.3
Supplier Deliveries51.150.649.852.948.256.5

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

July 2014 – January 2020

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
5 Feb 2020

52.7

International PSI

BNZ - BusinessNZ PCI

56.8

GDP-Weighted Index

53.1

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 increase from the previous month.

The January GDP-Weighted Index (56.8) increased 4.9 points from December, while the Free-Weighted Index (53.1) rose 1.5 points.  The fact that the services sector displayed much stronger levels of activity in January caused the GDP-Weighted Index to produce a much higher result - the highest since March 2018.

PCI Time Series Table

The results are seasonally adjusted.

National IndicesJan
2019
Sep
2019
Oct
2019
Nov
2019
Dec
2019
Jan
2020
GDP-Weighted Index 55.753.754.953.051.956.8
Free-Weighted Index54.551.954.852.451.653.1

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

July 2014 – January 2020

PCI Time Series Graph