New Zealand services sector grows for a fourth month as PSI eases to 50.9

New Zealand’s services sector expanded for a fourth consecutive month in September, according to the BNZ – BusinessNZ Performance of Services Index (PSI) released on Monday.

The seasonally adjusted PSI was 50.9 in September, down from a revised 51.0 in August and up from 50.5 in July, BusinessNZ said. A reading above 50.0 indicates the sector is generally expanding, and a reading below 50.0 indicates contraction.

What the sub-indices showed

New orders and inventories were the strongest components, at 52.6 and 52.3 respectively, according to BusinessNZ. New orders eased from 54.8 in August. Activity and sales rose to 50.2 from 49.2, returning to expansion. Employment stayed in contraction at 49.8, and supplier deliveries were the weakest component at 49.4.

Retail had the lowest index of all service industries, at 47.4, BusinessNZ said. Combining the PSI with the manufacturing index (PMI), the composite index rose to 51.6 in September.

What business groups said

BusinessNZ chief executive Katherine Rich said: “Four months in a row above breakeven is a genuinely positive run for services, even with September’s slight easing.” She added that businesses were “clearly in ‘wait and see’ mode with the election approaching.”

BusinessNZ said respondents’ comments pointed to cost-of-living pressures, fuel prices, interest rates and election uncertainty, with 59.9 per cent of comments negative, similar to August.

BNZ senior economist Doug Steel said the result “marks a fourth month of expansion, a notable feat after two years of contraction,” but that growth in services “remains weak, particularly compared to manufacturing.”

Background

The PSI is compiled by BusinessNZ and sponsored by Bank of New Zealand from a monthly survey of service-sector businesses. BusinessNZ’s data show the index at 48.1 in May 2026 before it returned to expansion at 50.8 in June; it was 48.6 in September 2025.