BNZ \u2013 BusinessNZ Performance of Services Index (PSI)<\/a>\u00a0for December was was 51.5 (A PSI reading above 50.0 indicates that the service sector is generally expanding; below 50.0 that it is declining). This was 4.3 points higher than November, though still below the average of 52.8 over the history of the survey.<\/p>\nWhile 51.5 would not be regarded as a strong reading, when put with the results of the\u00a0latest BNZ \u2013BusinessNZ Performance of Manufacturing Index (PMI), released on Friday, it shows an economy now finally turning a corner.<\/p>\n
The seasonally adjusted PMI for December was 56.1 (a PMI reading above 50.0 indicates that manufacturing is generally expanding; below 50.0 that it is declining). This was 4.4 points higher than November, and above the average of 52.5 since the survey began.<\/p>\n
In terms of the PSI released on Tuesday\u00a0BusinessNZ’s CEO, Katherine Rich said that the December result ended the longest run of contraction for the sector since the survey began, stretching to 21 months.\u00a0<\/p>\n
BNZ senior Economist Doug Steel said that the PSI is not strong, “but the positive direction of travel is important to acknowledge”.<\/p>\n
“It has been a long dark tunnel for many in the service sector over the past couple of years. But light has appeared.”<\/p>\n
Steel said when the PSI is joined with the large jump in last week\u2019s PMI, the combined index (PCI) signals \ufb01rmly positive GDP growth into the end of 2025 and establishes forward momentum heading into the New Year.<\/p>\n
After 21 consecutive months below the breakeven 50 mark anything indicating forward momentum is warmly welcomed, he said.<\/p>\n
“The index remains below its long-term average of 52.8 and so too does most of its major components, including new orders. However, it is the strongest result since June 2023.”<\/p>\n
He said notwithstanding that it is only one month\u2019s strength, the PCI activity indicator [the combination of the PSI and the PMI] “suggests upside risk to our near-term GDP growth forecasts”.<\/p>\n
It is a welcome change, Steel said, to be considering how fast activity is growing “rather than whether there will be any growth at all!”<\/p>\n
“Strong growth signals from the PMI and construction sector via more residential building consents have now been joined by the much bigger services sector. Even if the latter\u2019s growth is only mild at this point, it represents a broadening economic recovery.”<\/p>\n","protected":false},"excerpt":{"rendered":"We have lift off. The services sector – which makes up about two-thirds of our GDP – moved…\n","protected":false},"author":2,"featured_media":241881,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":{"0":"post-241880","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-new-zealand","11":"tag-newzealand","12":"tag-nz"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/241880","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=241880"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/241880\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/241881"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=241880"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=241880"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=241880"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}