Onwards and upwards – PSI

19 Jul 2021

58.6

June

+2.3

Monthly Change

expanding

faster rate

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Kirk Hope

Chief Executive, BusinessNZ

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New Zealand's services sector was in expansion mode for the fourth consecutive month, according to the BNZ - BusinessNZ Performance of Services Index (PSI).

The PSI for June was 58.6 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).  This was 2.3 points up from May, but still below its highest ever result of 61.1 in April.

BusinessNZ chief executive Kirk Hope said that the sector experienced a boost in expansion after a lift in the key sub-indices of Activity/Sales (62.5) and New Orders/Business (66.1).

"While the key indicators show very healthy expansion, comments from respondents were very similar to its sister survey the PMI, highlighting staff/skills shortages and general logistics issues."

BNZ Senior Economist Craig Ebert said that "combined, the PSI and PMI signal a hefty rate of growth in economic activity – in the realm of a 4% annual rate of growth in GDP. At one level, this is very encouraging. At another, it suggests the economy is running headlong into even-worse capacity constraint, and, with it, serious inflation pressure."

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Craig Ebert's profile

Craig Ebert

Senior Economist, BNZ

The PSI

In the space of three months, the Performance of Services Index (PSI) has gone from indicating scant growth to rapid expansion. In printing at 58.6 in June, the PSI established a June quarter average of 58.7. This compares to the average over the March quarter of 50.2.
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Employment plus

Certainly, much of the negatively headed feedback to the PSI survey in June related to ongoing problems with supplies, including increased lead times. Complaints also resonated regarding the scarcity of staff, with the closed borders partly to blame.
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Industry features

While the PSI is riding high overall, there is still interesting variability in its detail. Two of the strongest industries in June, for instance, were Property & Business (57.3) and Finance & Insurance (55.0).
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GDP inferences

But, really, it’s the now very strong force of the PSI, overall, that’s the important thing to note. Even stronger in June, of course, was the Performance of Manufacturing Index (PMI), which hit 60.7.
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View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National IndiciesJun
2020
Feb
2021
Mar
2021
Apr
2021
May
2021
Jun
2021
BNZ - BusinessNZ PSI 54.849.753.061.156.358.6
Activity/Sales 58.951.855.862.059.062.5
Employment45.551.452.260.954.556.5
New Orders/Business61.149.858.667.162.766.1
Stocks/Inventories51.850.150.655.051.450.9
Supplier Deliveries53.242.344.447.045.246.2

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

July 2014 – June 2021

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
7 Jul 2021

57.5

International PSI

BNZ - BusinessNZ PCI

59.1

GDP-Weighted Index

60.3

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 higher levels of expansion for June.

The June GDP-Weighted Index (59.1) increased 2.0 points from May, while the Free-Weighted Index (60.3) rose 2.5 points.

PCI Time Series Table

The results are seasonally adjusted.

National IndicesJun
2020
Feb
2021
Mar
2021
Apr
2021
May
2021
Jun
2021
GDP-Weighted Index 55.350.454.359.857.159.1
Free-Weighted Index56.452.157.859.057.860.3

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

July 2014 – June 2021

PCI Time Series Graph