The BNZ Capital – Business NZ Performance of Services Index (PSI) stood at 45.0 in June, down 1.2 points from May but up 1.3 points from April. 

Over the last three months the PSI has averaged 45.0 indicating that overall service sector activity has continued to contract throughout 2009. Looking year on year, the PSI in June 2009 stood 0.6 points below that recorded in June 2008 (45.6). A small difference, but a PSI reading above 50.0 indicates that the service sector is generally expanding.

New orders/business was the only indice to record an expansion in activity between May and June, moving from 49.7 to 50.8. Three other indices contracted during June, with the largest contraction, 3.7 points, in the indice for finished stock. The indice for activity/sales remained the same month on month.

Employment (43.6) remained weak in June, with all firms by employment size experiencing contraction. Last month the indice for employment lifted to its highest value for the 2009 year (46.3); however, looking at three monthly averages this indice has had an average value of 44.1.
Contraction also continued in the various service sectors, where results and sentiment were generally negative. The health and community services sector (48.6) and accommodation, cafes and restaurants (48.4) recorded the strongest levels of activity this month. Negative comments from respondents during June dropped slightly from 59.1 in May to 58.8 percent in June.

This weakness was reflected in the four main regions monitored; only Canterbury recorded a value above 50 in June. Comparing three month averages year-on-year, the contraction in the regions is evident. The largest contractions were in the Central and Canterbury regions, where three monthly averages year on year have declined 3.4 and 5.1 points respectively.