Source: Radio New Zealand
123RF
- Services sector PSI slips to 46.9, worst reading since May
- Sales, employment, deliveries fall, new orders move sideways
- Proportion of negative comments falls for fourth consecutive month
- Retail only bright spot
Services sector activity slowed further in November to its worst level in six months, putting a dampener on prospects for a solid new year recovery.
BNZ – BusinessNZ Performance of Services Index (PSI) for November fell by 1.5 points to 46.9.
A reading below 50 indicates the sector, which accounts for nearly three-quarters of the economy, has been going backwards. It has not been in expansion since February 2024.
BusinessNZ chief executive Katherine Rich said the latest reading dashed immediate hopes for an improvement to wards expansion.
“Negative comments received show the services sector overwhelmingly citing the weak economic environment, including low consumer confidence, high living costs, inflation, interest rates, and reduced spending, as the main factors affecting recent activity.”
All five sub-indicators lost ground with the biggest contraction in activity/sales, followed by deliveries, and employment, while new orders/business hovered just below the no change mark.
BNZ senior economist Doug Steel said the PSI reading was a wake-up call.
“Combined with the Performance of Manufacturing Index (PMI), the composite activity indicator poses downside risk to even modest growth expectations for early next year”.
The one bright spot was the retail sector, which rose to its strongest November monthly figure since 2017.
“Some of this might reflect changing spending patterns associated with seasonal sales (Black Friday). In any case, growth is coming off a low base.”
“We will have to wait until the new year to assess December spending and see whether it can add more support to the PSI,” he added.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
