Contraction continues – PSI

15 Feb 2021

47.9

January

-1.2

Monthly Change

contracting

faster rate

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Kirk Hope

Chief Executive, BusinessNZ

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Activity in New Zealand’s services sector remained in contraction for a third consecutive month, according to the BNZ - BusinessNZ Performance of Services Index (PSI).

The PSI for January was 47.9, which was down 1.2 points from December (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). This was also well below the long term average of 53.8 for the survey.

BusinessNZ chief executive Kirk Hope said that the January result was generally negative when examined more deeply.

"While New Orders/Business (53.7) remained in expansion mode, the remaining sub-indices all displayed contraction, including Activity/Sales (46.4) and Employment (46.9).  Looking at the comments made by respondents, the ongoing trend of contraction was typified by the influences of the Xmas period, ongoing COVID-19 related issues (including freight challenges) and a slower return to business as usual post holidays".

BNZ Senior Economist Doug Steel said that "combining last week’s very strong PMI with today’s soft PSI points to some slowing in growth. But we also need to factor in strong public sector jobs growth and a booming construction sector".

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Doug Steel's profile

Doug Steel

Senior Economist, BNZ

Soft Serve

A very strong bounce in Q3 GDP and solid Q4 labour market data shows the NZ economy is generally in a much better place than forecasters thought would be the case.  But that does not mean progress has been uniform.
Read more

Supply Side Issues Still Evident

Looking across the major PSI components in January, softness was visible in sales activity and employment after somewhat better readings in December.
Read more

Hospitality Hurting

After some better readings in previous months, the accommodation, cafes, and restaurant’s PSI slumped to an unadjusted 41.9 in January.
Read more

Not all bad

A weak PSI result fits with our long-held cautious view around near-term GDP, including a likely decline in the first quarter of 2021.
Read more

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National IndiciesJan
2020
Sep
2020
Oct
2020
Nov
2020
Dec
2020
Jan
2021
BNZ - BusinessNZ PSI 57.450.150.846.649.147.9
Activity/Sales 56.052.450.045.651.046.4
Employment53.349.149.749.052.846.9
New Orders/Business63.854.957.252.150.953.7
Stocks/Inventories57.345.351.845.848.449.9
Supplier Deliveries56.442.943.838.939.741.6

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

July 2014 – January 2021

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
3 Feb 2021

51.6

International PSI

BNZ - BusinessNZ PCI

49.2

GDP-Weighted Index

52.5

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 show contrasting results in January.

The January GDP-Weighted Index (49.2) remained unchanged from December.  However, the Free-Weighted Index (52.5) increased 3.0 points, given the PMI went into solid expansion during January.

PCI Time Series Table

The results are seasonally adjusted.

National IndicesJan
2020
Sep
2020
Oct
2020
Nov
2020
Dec
2020
Jan
2021
GDP-Weighted Index 56.250.650.947.749.249.2
Free-Weighted Index52.152.251.650.749.552.5

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

July 2014 – January 2021

PCI Time Series Graph