Ups and downs – PSI

14 Sep 2020

46.9

August

-7.5

Monthly Change

contracting

previously expanding

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Kirk Hope

Chief Executive, BusinessNZ

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Activity in New Zealand’s services sector returned to contraction mode for August, according to the BNZ - BusinessNZ Performance of Services Index (PSI).

The PSI for August was 46.9, which was down 7.5 points from July (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).  

BusinessNZ chief executive Kirk Hope said that unlike its sister survey for the manufacturing sector, the PSI returned to negative territory on the back of the level 3 lockdown in the Auckland region.

"The lockdown was felt throughout the country, as no region managed to show expansion during August.  Following previous patterns, a drop down to level 2 should reignite activity.  Barring a further outbreak in a major region, we would hope the sector gets back into expansion for the last quarter of 2020.

BNZ Senior Economist Craig Ebert said that "when the PSI and PMI are combined into a Composite Index (PCI), they hardly expunge the notion that GDP is on course to rebound markedly in Q3."

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Craig Ebert's profile

Craig Ebert

Senior Economist, BNZ

The PSI

With New Zealand shifting back up COVID alert levels on 12 August, it was no surprise to see August’s Performance of Services Index (PSI) dip. Its seasonally adjusted index fell to 46.9, from 54.4 in July.
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Regional Reach

With greater Auckland spending the second half of August under level-3 restriction, there was little news in the fact the PSI’s Northern zone saw a further sag in its (unadjusted) index – to 43.6, from 46.0.
Read more

Industry Impacts

The big hit to Otago/Southland’s PSI in August gels with the fact Aucklanders were largely prevented from travelling to other parts of the country over the second half of August.  And Otago is a popular destination during the winter, especially for its famed ski fields.
Read more

GDP Scoping

Given the obvious reason for their wobbles in August, the PSI (46.9), and PMI (50.7), still seemed consistent with an underlying improvement in the economy, from the huge hit it took back in March/April.
Read more

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National IndiciesAug
2019
Apr
2020
May
2020
Jun
2020
Jul
2020
Aug
2020
BNZ - BusinessNZ PSI 54.426.137.254.454.446.9
Activity/Sales 54.611.133.358.754.943.8
Employment52.942.140.245.349.747.0
New Orders/Business56.216.636.259.755.847.1
Stocks/Inventories53.545.946.752.455.849.0
Supplier Deliveries50.925.041.253.256.745.2

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

July 2014 – August 2020

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
3 Sep 2020

51.9

International PSI

BNZ - BusinessNZ PCI

47.4

GDP-Weighted Index

48.8

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 experience contraction for August.

The August GDP-Weighted Index (47.4) decreased 7.7 points from July, while the Free-Weighted Index (48.8) fell 8.3 points.

PCI Time Series Table

The results are seasonally adjusted.

National IndicesAug
2019
Apr
2020
May
2020
Jun
2020
Jul
2020
Aug
2020
GDP-Weighted Index 53.725.937.554.755.147.4
Free-Weighted Index51.824.238.056.157.148.8

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

July 2014 – August 2020

PCI Time Series Graph