Activity levels in New Zealand’s services sector saw a continuation of contraction for the second month of 2022, according to the BNZ – BusinessNZ Performance of Services Index (PSI).
The PSI for February was 48.6 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). While this was up 2.6 points from January, it was still well down on the long-term average of 53.6 for the survey.
BusinessNZ chief executive Kirk Hope said that the ongoing trend of contraction was expected given the current restrictions and interference many businesses in the services sector are experiencing at present.
“It was encouraging to see the key sub-indexes of New Orders/Business (53.6) and Activity/Sales (50.7) both return to positive territory. However, Employment (45.0) dropped to its lowest result since May 2020, while Supplier Deliveries (34.4) was at its lowest point since August 2021.”
BNZ Senior Economist Doug Steel said that “February marks the PSI’s seventh consecutive month below the breakeven 50 mark. Pain is accumulating. While there were some overs and unders in the components, all remain below their respective long-term averages.”
