Upwards momentum – PSI 20 Jun 2022 55.2May+3.0Monthly Changeexpandingfaster rate Kirk Hope Chief Executive, BusinessNZ View profile 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 Doug SteelSenior Economist, BNZ PSI heads higherAfter 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 firmDemand 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 mixedSupplier 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 TableThe results are seasonally adjusted. National Indicies May2021 Jan2022 Feb2022 Mar2022 Apr2022May2022 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 International ResultsJ.P. Morgan Global Manufacturing PSITM 6 Jun 202252.2 55.0GDP-Weighted Index54.8Free-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 TableThe results are seasonally adjusted. National IndicesMay2021Jan2022Feb2022Mar2022Apr2022May2022 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 In this section Surveys & Statistics Performance of Manufacturing Index Performance of Services Index Compliance Cost Survey Exporters Survey Southern Cross Health Society - BusinessNZ Wellness in the Workplace Survey Reports & Publications BusinessNZ Planning Forecast International BusinessNZ RAT Suppliers Guides & Tools BusinessNZ RAT Suppliers RATs for non-critical business, agencies and organisations BNZ - BusinessNZ PSI Time Series Data View seasonally adjusted and unadjusted time series data for the BNZ - BusinessNZ PSI BNZ - BusinessNZ PCI Time Series Data View seasonally adjusted and unadjusted time series data for the BNZ - BusinessNZ combined PMI & PSI. BNZ is delighted to be associated with the Performance of Services Index (PSI) and BusinessNZ.This association brings together the significant experience of leading business advocacy body BusinessNZ, and business finance specialist BNZ.We look forward to continuing our association with BusinessNZ and associated regional organisations, and to playing our part in the ongoing development of the New Zealand service sector. View website Media Comment For media comment, please contact: Kirk Hope, 04 496 6560 Doug Steel, BNZ 04 474 6799 Technical Comment For more information or assistance with data interpretation, please contact: Steve Summers 04 496 6564 ssummers@businessnz.org.nz Our ContributorsThe BNZ - BusinessNZ PSI contains data obtained through BusinessNZ's regional organisations About the PSIThe BNZ - BusinessNZ Performance of Services Index is a monthly survey of the service sector providing an early indicator of activity levels.A PSI reading above 50 points indicates service activity is expanding; below 50 indicates it is contracting.The main PSI and sub-index results are seasonally adjusted.About the PCIThe BNZ - BusinessNZ Performance of Composite Index (PCI) takes into account results from both the Performance of Manufacturing Index (PMI) and the Performance of Services Index (PSI). Combined results are shown in two ways: GDP-Weighted Index: Apportions the weight of the manufacturing and services index within the economy to produce an overall result. Free-Weighted Index: Combines data from both indexes to produce an overall result.Both time series for the PCI are then seasonally adjusted. Related Articles RMA shakeup long overdue Softening in September – PSI Spring is in the air Smooth operator – PSI Easing expansion – PSI View more