Upwards momentum – PSI

20 Jun 2022

55.2

May

+3.0

Monthly Change

expanding

faster rate

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Kirk Hope

Chief Executive, BusinessNZ

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Activity levels in New Zealand's services sector displayed upwards momentum during May, according to the BNZ - BusinessNZ Performance of Services Index (PSI).

The PSI for May was 55.2 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).  This was up 3 points from April, and above the long-term average of 53.6 for the survey.

BusinessNZ chief executive Kirk Hope said that the May result represented the highest monthly result since June 2021, and the fourth consecutive time showing increased activity from the previous month.  Obviously, any rush to conclude the sector is now firmly back on track needs to be tempered with the fact that there are still a number of potential headwinds coming, both domestically and internationally.

"The two key sub-indexes of New Orders/Business (62.0) and Activity/Sales (59.6) both experienced a healthy pick-up in activity to lead the way in overall expansion.  While Employment (48.5) went back into contraction during May, Supplier Deliveries (45.0) recovered somewhat from earlier lows."  

With the pick-up in expansion, the proportion of negative and positive comments were exactly even for May, compared with 61.9% of negative comments in April.

BNZ Senior Economist Doug Steel said that "while the improvement was far from universal across components, reflecting many ongoing challenges across segments of the service sector, the overall outcome was the first above average result since the outbreak of Delta in August last year."

View the PSI Time Series Data


Main Indicies

Regional Results

Services Landscape
View Doug Steel's profile

Doug Steel

Senior Economist, BNZ

PSI heads higher

After a somewhat disappointing April result in the context of easing COVID restrictions during that month (Red to Orange), the Performance of Services Index (PSI) made a more strident step forward in May.
Read more

Demand indicators firm

Demand components led the charge in May. New orders/business rose to an outright strong 62.0 from a soso reading of 55.2 in April. Activity/sales also rose strongly to 59.6, to be well above its long term average of 54.8.
Read more

Headway or Headfake?

It remains to be seen how durable the bounce in the PSI turns out to be. But along with last week’s solid PMI reading, a lift in the combined index (PCI) adds weight to our long-held view that GDP will bounce strongly in Q2 following its weakness in Q1.
Read more

Supply issues remain, although more mixed

Supplier deliveries remain an issue, with this component still languishing below the 50 mark as it has done since shortly after the pandemic started.
Read more

View the BNZ Services Landscape

PSI Time Series Table

The results are seasonally adjusted.

National Indicies May
2021
Jan
2022
Feb
2022
Mar
2022
Apr
2022
May
2022
BNZ - BusinessNZ PSI 55.5 46.1 48.8 51.7 52.2 55.2
Activity/Sales 57.1 44.2 50.8 53.7 53.3 59.6
Employment 55.3 47.8 44.5 49.1 51.0 48.5
New Orders/Business 61.0 40.5 54.6 59.2 55.2 62.0
Stocks/Inventories 50.2 48.6 50.7 52.9 55.0 54.6
Supplier Deliveries 43.9 44.0 33.7 41.1 40.7 45.0

View the PSI Time Series Data

BNZ - BusinessNZ PSI Time Series

January 2016 – May 2022

PSI Time Series Graph

International Results

J.P. Morgan Global Manufacturing PSITM
6 Jun 2022

52.2

International PSI

BNZ - BusinessNZ PCI

55.0

GDP-Weighted Index

54.8

Free-Weighted Index

The seasonally adjusted BNZ - BusinessNZ Performance of Composite Index or PCI (which combines the PMI and PSI) saw both options for measuring the May PCI improve in expansion. 

The May GDP-Weighted Index (55.0) increased 3.5 points from April, while the Free-Weighted Index (54.8) rose 3.9 points.

PCI Time Series Table

The results are seasonally adjusted.

National IndicesMay
2021
Jan
2022
Feb
2022
Mar
2022
Apr
2022
May
2022
GDP-Weighted Index 55.946.949.451.651.555.0
Free-Weighted Index57.348.151.652.050.954.8

View the PCI Time Series Data

BNZ - BusinessNZ PCI Time Series

January 2016 – May 2022

PCI Time Series Graph