BusinessNZ Performance of Services Index (PSI) falls back into contraction

What does this mean for New Zealand?

The latest data shows that the BusinessNZ Performance of Services Index (PSI) fell back into contraction during December, with a reading of 48.8, down 2.3 points from November. This is well below the long-term average of 53.4. According to BNZ, this softening in the PSI, combined with weakness in the PMI, is bad news for both near-term growth and employment in New Zealand.

One of the key drivers of the services sector in New Zealand has been tourism. While tourism will continue to support the economy, it cannot do all the heavy-lifting on its own. The current situation calls for a closer look at other sectors and areas that can contribute to economic growth.

How will this affect me?

As a resident of New Zealand, the contraction in the PSI could have an impact on various aspects of your life. It may lead to slower growth in the economy, which could affect job opportunities and income levels. It might also result in changes to the kinds of services available to you, as businesses adjust to the economic conditions. It’s important to stay informed and be prepared for any potential changes that may come as a result of this development.

How will this affect the world?

The weakening of the PSI in New Zealand could have ripple effects on the global economy. As an important player in international trade and tourism, any slowdown in the New Zealand economy could impact global markets and supply chains. It’s essential for businesses and governments worldwide to monitor the situation and adapt their strategies accordingly to mitigate any potential risks.

Conclusion

In conclusion, the contraction in the BusinessNZ Performance of Services Index is a concerning development for New Zealand’s economy. It highlights the need for diversification and resilience in the face of shifting economic conditions. By staying informed and proactive, both individuals and businesses can navigate these challenges and work towards a more stable and prosperous future.