2013 represented a solid story of growth for New Zealand’s services sector, according to the BNZ - BusinessNZ Performance of Services Index (PSI).
The PSI for December was 57.5. This was up 1.1 points from November, with the last quarter being the strongest for activity since 2007 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). Over 2013, the PSI averaged 55.8, compared with 53.9 for 2012 and 52.7 for 2011.
BusinessNZ chief executive Phil O’Reilly said that the last quarter of 2013 indicates the services sector is moving up a gear in terms of expansion
“While there are always seasonal factors at play during this time of year, the fact remains that new orders and activity/sales are consistently strong, which should feed through into future results. The proportion of positive comments remains high, with many outlining the new level of optimism and positively in the market.
BNZ Senior Economist Craig Ebert said the PSI suggests a pickup in production is gathering momentum.
“The new-orders index is by far the fastest component of all, increasing at a rapid rate of knots. We can believe this will be the case for the output index of the PSI over the first few months of 2014.”
All five main sub-indices were again in expansion during December, which has now been the case for the last eight months. New orders/business (62.4) continued its top spot, with eight of the last nine results showing a post-60 point value. Activity/sales (59.8) picked up 1.3 points from November, while employment (52.6) dipped in expansion levels after three consecutive months of rising activity. Both stocks/inventories (54.2) and supplier deliveries (52.9) experienced an uplift in expansion from during December.
Activity was positive across all of the country in December. In the North Island, the Central region (61.0) experienced another increase in expansion to record its first post-60 point value since March 2012. In contrast, the Northern region (57.4) dipped back to levels of expansion seen in September. In the South Island, the Canterbury/Westland region (52.6) picked up pace, while the Otago/Southland region (55.1) saw more moderate levels of expansion compared with November.
The seasonally adjusted BNZ - BusinessNZ Performance of Composite Index or PCI (which combines the PMI and PSI) for December saw both options for measuring the PCI continue their steady march upwards. The GDP-Weighted Index (57.5) increased 1.7 points from November, while the Free-Weighted Index (56.9) rose 0.2 points.
Link to the December PSI & PCI
Link to PSI time series data
Link to PCI time series data