Struggle street – PSI

15 Mar 2021

49.1

February

+1.1

Monthly Change

contracting

slower 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 fourth consecutive month, according to the BNZ - BusinessNZ Performance of Services Index (PSI).

The PSI for February was 49.1, which was up 1.1 points from January (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).  However, it was still well below the long term average of 53.8 for the survey.

BusinessNZ chief executive Kirk Hope said that while the slight pick-up in activity to levels seen in December was obviously a positive step, the sector remains below the critical 50.0 mark.  The last time the sector was in contraction for four consecutive months was the first half of 2009.

"The slower return to business as usual post holidays was compounded by the two separate lockdown periods in mid and late February, with Auckland hit hardest.  This has meant the key sub-indices of Activity/Sales (50.8) and New Orders/Business (50.3) were both lethargic over February."

BNZ Senior Economist Craig Ebert said that "when simply averaging across all responses to the PSI and PMI surveys gives a composite reading of 51.6 for February.  But re-weighting for the fact services comprise around 70% of the economy and the composite index yields 49.7. With this, we remain decidedly cautious on GDP growth for Q1."

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Craig Ebert's profile

Craig Ebert

Senior Economist, BNZ

The PSI

New Zealand’s services sector continues to struggle. This remains the abiding message from the Performance of Services Index (PSI). While it did improve in February, at 49.1 (from 48.0 in January) it was still below the breakeven mark of 50.
Read more

Covid Restriction Impacts?

Having said this, there is good reason to believe the PSI can bounce in March, because February was beset by the latest rash of lockdowns, on account of community cases of Covid19 found in Auckland.
Read more

In Tune with Electronic Transactions Clanger

These parts of the PSI, as it turned out, were in keeping with the weakness that occurred in February’s electronic card transactions. These fell a nasty 3.2%, to be 8.1% down on year-ago levels. And the culprits were clear.
Read more

The Importance of Services in GDP

February’s PSI has also been important in indicating the generalities to growth, not just some specifics. In dallying at 49.1 it offset the decent news we continued to see in the PMI, which, at 53.3 for February was running around normal.
Read more

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National IndiciesFeb
2020
Oct
2020
Nov
2020
Dec
2020
Jan
2021
Feb
2021
BNZ - BusinessNZ PSI 52.550.846.749.248.049.1
Activity/Sales 54.850.045.651.146.950.8
Employment50.349.749.352.846.650.9
New Orders/Business55.557.252.050.753.350.3
Stocks/Inventories52.251.845.848.349.745.9
Supplier Deliveries44.943.739.139.741.640.8

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

July 2014 – February 2021

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
3 Mar 2021

52.8

International PSI

BNZ - BusinessNZ PCI

49.7

GDP-Weighted Index

51.6

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 again show contrasting results in February.

The February GDP-Weighted Index (49.7) rose 0.4 points in February.  However, the Free-Weighted Index (51.6) decreased 1.3 points.

PCI Time Series Table

The results are seasonally adjusted.

National IndicesFeb
2020
Oct
2020
Nov
2020
Dec
2020
Jan
2021
Feb
2021
GDP-Weighted Index 52.850.947.749.349.349.7
Free-Weighted Index54.051.650.749.552.951.6

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

July 2014 – February 2021

PCI Time Series Graph