Waiting game – PSI

13 Dec 2021

46.5

November

+1.6

Monthly Change

contracting

slower rate

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Kirk Hope

Chief Executive, BusinessNZ

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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."

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Craig Ebert's profile

Craig Ebert

Senior Economist, BNZ

The PSI

Just like the PMI did, the Performance of Services Index (PSI) disappointed for November. Far from reclaiming an expansive tone – as seemed possible, considering COVID-related restrictions tended to abate in the month – the PSI kept a contractionary tone.
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Not all weak

While the supply-side metrics are no great surprise, other messages from November’s PSI proved curious. For example, for all of Auckland’s travails over recent months – as level 3 restrictions hung around – it was Otago/Southland that reported the weakest regional result, by far, with an unadjusted 33.6 (Northern was at 47.5).
Read more

Implications for GDP

In terms of their signals for GDP, the latest PSI, along with the PMI, counsel caution about the rebound we can expect for Q4.  Yes, it looks as though Q3 GDP might not drop as much as earlier feared (with that result due Thursday). This would put less onus on Q4 GDP to jump, to keep things on plan.
Read more

Global guidance

One of the great unknowns is how the NZ populace handles the virus circulating more widely in the country, under the traffic-light system, and the about-to-be loosened border around Auckland.
Read more

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National IndiciesNov
2020
Jul
2021
Aug
2021
Sep
2021
Oct
2021
Nov
2021
BNZ - BusinessNZ PSI 45.955.735.446.644.946.5
Activity/Sales 44.861.325.143.444.445.6
Employment49.254.349.051.450.050.3
New Orders/Business52.159.232.547.446.354.4
Stocks/Inventories46.950.847.549.746.146.7
Supplier Deliveries40.245.826.441.236.837.8

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

July 2014 – November 2021

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
3 Dec 2021

55.6

International PSI

BNZ - BusinessNZ PCI

47.0

GDP-Weighted Index

49.1

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 November PCI again show contrasting outcomes.

The November GDP-Weighted Index (47.0) increased 0.9 points from October, while the Free-Weighted Index (49.1) decreased 0.9 points, slipping back into contraction.

PCI Time Series Table

The results are seasonally adjusted.

National IndicesNov
2020
Jul
2021
Aug
2021
Sep
2021
Oct
2021
Nov
2021
GDP-Weighted Index 47.056.736.147.446.147.0
Free-Weighted Index50.160.937.449.150.049.1

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

July 2014 – November 2021

PCI Time Series Graph