Activity levels in New Zealand’s services sector improved slightly during November, although still remained in overall contraction, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
The PSI for November was 46.5 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). This was up 1.6 points from October, and almost identical to the September result.
BusinessNZ chief executive Kirk Hope said that the stagnant nature of recent results exemplifies the difficult trading conditions many businesses currently find themselves in.
“The key sub-index of Activity/Sales (45.6) remains n contraction, although continues to improve slightly from its low in August. More encouragingly, New Orders/Business (54.4) returned to expansion for the first time since July, which was likely due to easing of lockdown conditions. While Employment (50.3) remains close to no change, both Stocks/Inventories (46.7) and Supplier Deliveries (37.8) have yet to show expansion since the 2021 nationwide lockdown.”
BNZ Senior Economist Craig Ebert said that “we can surely expect the PSI, and even the PMI, to improve in December, given New Zealand’s move into the less-restrictive “traffic-light” system of COVID management near the start of the month. Still, the latest PSI and PMI results warn against taking a strong bounce in GDP for granted, at this point.”
