The services sector remains in contraction but activity has picked up.
BusinessNZ chief executive Kirk Hope said despite improvements in the sector, Covid-19 and its associated restrictions still dominated comments from PSI respondents. Photo: 123rf
The BNZ-Businesss New Zealand Performance of Services (PSI) Index rose 11.5 points in September to 46.9, from August's 35.6 points.
A reading below 50 indicates contraction.
BusinessNZ chief executive Kirk Hope said there had been an overall improvement for services in September, with some easing of lockdown restrictions, but it was not business as usual.
"Covid-19 and its associated lockdown/restrictions still completely dominate comments from respondents, while the key sub-indexes of activity/sales (45.3) and new orders/business (47.5) remain in contraction," Hope said.
"At what point the PSI returns to expansion will largely depend on any upcoming changes to alert levels in the weeks ahead."
BNZ senior economist Doug Steel said there were some positives in what was largely a negative result.
"The key positive in September's PSI is employment, lifting to an above average 52.0 from August's 49.3," Steel said.
"This seems consistent with firms expecting activity to bounce once restrictions are eased, fiscal support from government, and a reluctance to let staff go."
He said the strength of the labour market was positive, even with a huge drop in economic growth over the third quarter ended in September.
The seasonally adjusted BNZ - BusinessNZ Performance of Composite Index or PCI, which combined the Performance Manufacturing Index (PMI) and PSI, saw an overall improvement, although still stuck in contraction.
The PMI for September was up 11.7 points after August's slump, to 51.4.
