New Zealand’s BusinessNZ Service Performance Index experienced a notable decline in October, falling from 50.6 to 48.9, a level that indicates contraction for the sector. This decline left the index well below its long-term average of 53.5.
Activity and sales fell significantly, rising from 50.9 to 47.4. Employment also slumped, decreasing from 50.5 to 49.3. New orders and business declined as well, from 53.9 to 51.9. On a more positive note, stocks and inventories increased from 48.0 to 51.1 and supplier deliveries rose slightly from 49.7 to 49.8.
Despite this decline, the percentage of negative comments decreased to 58.2% in October, down from 61.8% in September and 63.9% in August, indicating a slight improvement in business confidence.
“PSI (48.9) and PMI (42.5) together represent economic uncertainty,” BNZ senior economist Craig Evert said. This raises alarm about GDP in the third quarter, after the second quarter saw an astonishing 0.9% growth. ”