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Kirk HopeChief Executive
BusinessNZ
18 September 2017
“Looking at the sub-indices, the two key values of activity/sales (62.9) and new orders/business (63.1) picking up pace assisted the overall result. In addition, the proportion of positive comments (66.9%) lifted well above the 60-point mark compared with July”.
BNZ Senior Economist Craig Ebertl said that “melded with the PMI, the latest PSI forms a picture of rude growth in the NZ economy, overall. Indeed, the composite index continues to point to annual GDP growth running in the order of 3 to 4%”.
New Zealand’s services sector experienced a lift in expansion during August, according to the BNZ - BusinessNZ Performance of Services Index (PSI).
The PSI for August was 57.3, which was 1.3 points higher than July (A PSI read-ing above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining).
BusinessNZ chief executive Kirk Hope said that after the 2.3 point dip in ex-pansion during July, the movement upwards towards more solid expansion was positive to see.
Upwards and onwards
View PSI Time Series Data
57.3 +1.3 expandingAugust Value Monthly Change Faster rate
BNZ - BUSINESSNZPERFORMANCE OFSERVICE INDEX
Craig EbertSenior Economist
RetailRetail trade will surely be another of the strong points of the Q2 GDP accounts. However, this was flat-tered by international visitors for the Lions’ rugby tour (mainly June) and World Masters Games (April).
Read more →
HousingThe REINZ data for August continued to look slow to slower, driven by Auckland, although they were arguably not as soft as expected, especially when considering the impending election.
Read more →
The PSI The Performance of Services Index (PSI) acquitted itself very well in August. It posted a seasonally adjusted reading of 57.3, from 56.0 in July. In this, like we saw in the PMI, there appeared little in the way of election nerves. Read more →
GDP Implications Melded with the PMI, the latest PSI forms a picture of rude growth in the NZ economy, overall. Indeed, the composite index continues to point to annual GDP growth running in the order of 3 to 4%. Read more →
Services Landscape
View full BNZ Services Landscape
Main Indices Regional Results
Activity/Sales
Employment52.2
SupplierDeliveries
51.4New Orders
Business63.1
StocksInventories
52.8
62.9
59.4
54.7
55.7
55.8
January 2012- August 2017
BNZ - BusinessNZ PSI Time Series
National Indices Aug2016
Apr2017
May2017
Jun2017
Jul2017
Aug2017
BNZ - BusinessNZ PSI
Activity/Sales
Employment
New Orders/Business
Stocks/Inventories
Supplier Deliveries
Results are seasonally adjusted
PSI Time Series Table
51.452.056.654.947.857.2
52.852.454.754.446.256.2
63.160.263.863.055.760.2
52.255.054.054.155.754.7
62.955.859.262.652.161.2
57.356.058.358.553.058.0
54.16 September 2017
J.P. Morgan Global Manufacturing PSITM
International Results
USA
Australia
Eurozone
UK
China
Japan
NZ54.9
56.953.8
51.5
53.0
57.3
52.0
National Indices Aug2016
Apr2017
May2017
Jun2017
Jul2017
Aug2017
GDP-Weighted
Free-Weighted
Results are seasonally adjusted
PCI Time Series Table
View PCI Time Series Data
57.956.257.459.054.956.4
57.355.957.858.453.757.5
57.3 57.9GDP-Weighted Index Free-Weighted Index
BNZ - BUSINESSNZPERFORMANCE OFCOMPOSITE 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 PCI again both improve during August. The August GDP-Weighted Index (57.3) increased 1.4 points from July, while the Free-Weighted Index (57.9) rose 1.7 points. The increase in expansion levels for both the manufacturing and services sector led to both measures picking up expansion during August.
January 2013 - August 2017
BNZ - BusinessNZ PCI Time Series
The BNZ - BusinessNZ Performance of Services Index contains data obtained through BusinessNZ’s regional organisations and Hospitality NZ.
Our Contributors
Level 6, JacksonStone House, 3-11 Hunter Street, Wellington 6140+64 4 496 6444 | [email protected]
About the PSI About the PCI
The 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 areseasonally adjusted.
www.businessnz.org.nz/psi
The BNZ - BusinessNZ Performance ofComposite Index (PCI) takes into accountresults from both the Performance ofManufacturing Index (PMI) and thePerformance of Services Index (PSI).Combined results are shown in twoways:
GDP-Weighted Index: Apportions theweight of the manufacturing and servicesindex within the economy to produce anoverall result.
Free-Weighted Index: Combines datafrom both indexes to produce an overallresult.
Both time series for the PCI are thenseasonally adjusted.
Stephen Summers:
Technical Comment
04 474 6799
Craig Ebert
04 496 6552
Kirk Hope:
For media comment, contact:
Media CommentSponsor StatementBNZ is delighted to be associated with the Performance of Services Index (PSI) and BusinessNZ.
The association brings togetherthe significant experience of leading business advocacy bodyBusinessNZ, and business financespecialist BNZ.
We look forward to continuing ourassociation with BusinessNZ and associated regional organisations, and to playing our part in theongoing development of the NewZealand service sector.
04 496 6564
Services Landscape
18 September 2017
research.bnz.co.nz
Page 1
The PSI The Performance of Services Index (PSI) acquitted itself very well in August. It posted a seasonally adjusted reading of 57.3, from 56.0 in July. In this, like we saw in the PMI, there appeared little in the way of election nerves. And similarly, the driving force in the latest Services Index proved to be new orders/business, which accelerated to 63.1, along with activity/sales, at a relatively fast 62.9. But August’s PSI, unlike the PMI for the month, had a relative blot on its copybook, in the form of its employment index. While this was still expansive – in fact, still a tad above its long-term average (51.6) – it nonetheless slowed noticeably to 52.2, from 55.0 in July.
GDP Implications Melded with the PMI, the latest PSI forms a picture of rude growth in the NZ economy, overall. Indeed, the composite index continues to point to annual GDP growth running in the order of 3 to 4%. This is a bit more than we are formally forecasting for the near term, which is 2.5 to 3.0%. As for the June quarter GDP accounts (due 21 September), we are looking for annual growth to come in at 2.5%. This is based on real GDP expanding 0.8% in the quarter itself, after its 0.5% increase in the March quarter. While this pick-up is stoked by primary industry production, the expansion continues to be underpinned by the services sector, in our estimation.
Retail Retail trade will surely be another of the strong points of the Q2 GDP accounts. However, this was flattered by international visitors for the Lions’ rugby tour (mainly June) and World Masters Games (April). So we expect retail trade to contract a little in the September quarter. This is shaped already by recent electronic card transactions. While they increased 0.6% in August this simply made up for their decline in July. As for the underlying trend, we note the retail component of the PSI, while hardly strong over recent months (in non-seasonally adjusted form) wasn’t struggling either. We also have to pay heed to the heights of consumer confidence of late (pre-election).
Housing The REINZ data for August continued to look slow to slower, driven by Auckland, although they were arguably not as soft as expected, especially when considering the impending election. Yes, sales were down 20% on a year ago, after LVR tightening. But they were -24.5% y/y in July and -24.7% in June. The new composition-controlled SPAR house price index increased 0.5% in the month and over the 12 months. But most interesting in this was that Auckland was down 2.9% compared to a year ago while for the rest of the country prices were up 7.0%. But, bigger picture, we’ll just have to wait until the post-election data to judge the housing market undercurrents.
Boxing On
Good to Go
Predominantly Positive
Turnover Down But Inflation Varied
Services Landscape 18 September 2017
research.bnz.co.nz
Page 2
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