Challenging times – PSI

18 Oct 2021

46.9

September

+11.5

Monthly Change

contracting

slower rate

View Kirk Hope's profile

Kirk Hope

Chief Executive, BusinessNZ

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New Zealand's services sector remained in contraction during September, according to the BNZ - BusinessNZ Performance of Services Index (PSI).

The PSI for September was 46.9 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).  This was up 11.5 points from August as the country moved down alert levels during September, freeing up some businesses for increased activity.

BusinessNZ chief executive Kirk Hope said that despite the improvement in the overall result for September, current restrictions still mean business as usual for most of the country is still a ways off yet.

"COVID-19 and its associated lockdown/restrictions still completely dominate comments from respondents, while the key sub-indexes of Activity/Sales (45.3) and New Orders/Business (47.5) remain in contraction.  At what point the PSI returns to expansion will largely depend on any upcoming changes to alert levels in the weeks ahead."

BNZ Senior Economist Doug Steel said that "subdued new orders warn against expecting too much of a bounce in coming months. Of course, the spread of COVID, vaccination rates, and any restriction changes will have a very large bearing on that."

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Doug Steel's profile

Doug Steel

Senior Economist, BNZ

Doing it tough

Not surprisingly, New Zealand’s service sector continues to show substantial pain as COVID alert level restrictions linger. The pain is by no means uniform across various segments but is all too obvious in the headline figures.
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Reality versus expectations

Today’s below average PSI also contrasts with other surveys that often ask about expectations or general confidence (which seem to be holding up ok). The PSI is a survey of outcomes and thus reflects the difficult trading conditions that many have encountered.
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Much variation

Unadjusted PSI readings show very large variations across various segments. By industry, Accommodation, Cafes & Restaurants, Cultural, Recreational & Personal, and Retail Trade saw the weakest readings in September.
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Employment robust

The key positive in September’s PSI is employment, lifting to an above average 52.0 from August’s 49.3. This seems consistent with firms expecting activity to bounce once restrictions are eased, fiscal support from government, and a reluctance to let staff go.
Read more

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National IndiciesSep
2020
May
2021
Jun
2021
Jul
2021
Aug
2021
Sep
2021
BNZ - BusinessNZ PSI 50.256.057.455.235.446.9
Activity/Sales 54.758.260.960.125.545.3
Employment49.754.356.254.449.352.0
New Orders/Business54.962.664.359.232.347.5
Stocks/Inventories45.251.250.651.448.051.5
Supplier Deliveries43.545.245.746.526.742.1

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

July 2014 – September 2021

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
5 Oct 2021

53.4

International PSI

BNZ - BusinessNZ PCI

47.5

GDP-Weighted Index

49.0

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 September PCI both improve, although still stuck in contraction.

The September GDP-Weighted Index (47.5) increased 11.5 points from August, while the Free-Weighted Index (49.0) also rose 11.5 points.

PCI Time Series Table

The results are seasonally adjusted.

National IndicesSep
2020
May
2021
Jun
2021
Jul
2021
Aug
2021
Sep
2021
GDP-Weighted Index 50.756.957.955.736.047.5
Free-Weighted Index52.258.259.160.337.549.0

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

July 2014 – September 2021

PCI Time Series Graph