New Zealand’s services sector remained under heavy strain in October, with the BusinessNZ Performance of Services Index inching up from 48.3 to 48.7 but still locked firmly in contraction.Activity, employment, and new orders all hovered below 50, extending the sector’s downturn to 20 straight months and keeping the headline reading well below the long-term average of 52.8.
Businesses cited weak demand as the principal drag, linking the slowdown to reduced household spending, ongoing cost-of-living pressures, and diminished confidence. While the proportion of negative comments fell from 58.0% to 54.1%, responses still pointed to a market struggling with inconsistent sales flows and hesitant customers. The continued decline in new orders signals that firms are not yet seeing a meaningful turn in forward demand.
Operating costs, competitive intensity, workflow delays, and cancelled projects are adding further strain, tightening cashflow and limiting the ability of firms to absorb volatility.
