Under Par – PSI 26 Jan 2021 49.2December+2.5Monthly Changecontractingslower rate Kirk Hope Chief Executive, BusinessNZ View profile Activity in New Zealand’s services sector improved from the previous month, but still recorded contraction, according to the BNZ - BusinessNZ Performance of Services Index (PSI).The PSI for December was 49.2, which was up 2.5 points from November (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). The PSI averaged 47.0 over 2020.BusinessNZ chief executive Kirk Hope said that the December result typified a difficult year for the sector, with half the year spent in contraction."While June and July showed a post-lockdown recovery, the remainder of 2020 displayed either soft expansion or contraction. The two key sub-indices of activity/sales and new orders/business failed to show any consistent pattern of expansion, while the remaining sub-indices spent a significant proportion of time under the key 50.0 mark".BNZ Senior Economist Craig Ebert said that "activity indicators such as these have had their work cut out lately, in trying to nail GDP to the nearest percent. In any case, the composite index is consistent with our view that NZ real GDP will be broadly flat over the six months to March 2021". View the PSI Time Series Data Main Indicies Regional Results Services Landscape Craig EbertSenior Economist, BNZ The PSIAfter bobbing up to the surface back in June and July, New Zealand’s Performance of Services Index (PSI) has since been treading water. This was affirmed in December’s reading.Read moreIndustryBy industry, Transport & Storage remained the most obvious weak spot, with an (unadjusted) index of 31.3, from 33.3 in November. Could this (and the noted weakness in supplier deliveries) be yet another manifestation of the supply problems we keep hearing about?Read moreQSBO ParallelsAs it turned out, the latest PSI gelled with the services component of last week’s NZEIR Quarterly Survey of Business Opinion (QSBO), in that the latter was still reserved in its reports of activity regarding the trailing three months.Read moreGDP Growth Touch and GoIt wasn’t just the PSI that was labouring in December. So too was the Performance of Manufacturing Index (PMI), which stumbled to 48.7, from 55.3 in November. Combined, the PSI and PMI painted a picture of GDP struggling to expand, after the latter’s massive rebound in the September quarter.Read more View the BNZ Services Landscape PSI Time Series TableThe results are seasonally adjusted. National IndiciesDec2019Aug2020Sep2020Oct2020Nov2020Dec2020 BNZ - BusinessNZ PSI 50.947.350.150.846.749.2 Activity/Sales 50.645.752.450.145.851.3 Employment50.747.849.249.949.351.7 New Orders/Business53.448.555.057.252.050.6 Stocks/Inventories50.648.545.051.545.347.9 Supplier Deliveries48.145.042.843.639.139.5 View the PSI Time Series Data BNZ - BusinessNZ PSI Time Series January 2016 – December 2020 International ResultsJ.P. Morgan Global Manufacturing PSITM 6 Jan 202151.8 49.2GDP-Weighted Index49.1Free-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 almost identical results during December.The December GDP-Weighted Index (49.2) increased 1.5 points from November. The Free-Weighted Index (49.1) decreased 1.4 points after showing slight expansion in November. PCI Time Series TableThe results are seasonally adjusted. National IndicesDec2019Aug2020Sep2020Oct2020Nov2020Dec2020 GDP-Weighted Index 50.847.850.650.947.749.2 Free-Weighted Index50.349.252.151.450.549.1 View the PCI Time Series Data BNZ - BusinessNZ PCI Time Series January 2016 – December 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 BusinessNZ RAT Suppliers Guides & Tools BusinessNZ RAT Suppliers RATs for non-critical business, agencies and organisations 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