New Zealand’s services sector showed signs of stabilization in April, though activity remained in contraction territory as firms continued to grapple with rising fuel costs and disruption linked to the Middle East conflict. BusinessNZ Performance of Services Index improved from 46.2 to 48.9, but still below the 50 expansion threshold.
Underlying components were mixed but generally less weak. Activity/sales rose from 44.7 to 48.9, while employment improved from 46.6 to 48.5. New orders/business provided the brightest signal, climbing from 46.0 to 51.2 to return to expansion territory. However, supplier deliveries slipped from 47.2 to 46.6, while stocks/inventories edged up from 46.2 to 47.6.
BusinessNZ Chief Executive Katherine Rich said more than two-thirds of respondents continued to report negative conditions, with many citing fuel prices as a major pressure point. She warned that ongoing disruption to shipping through the Strait of Hormuz made a quick return to sector-wide expansion difficult to envision.
Smaller firms appeared particularly vulnerable, with the micro-business sub-index at just 44.4, while medium-large firms outperformed at 55.5.
| Component | March | April |
|---|---|---|
| Headline PSI | 46.2 | 48.9 |
| Activity / Sales | 44.7 | 48.9 |
| Employment | 46.6 | 48.5 |
| New Orders / Business | 46.0 | 51.2 |
| Stocks / Inventories | 46.2 | 47.6 |
| Supplier Deliveries | 47.2 | 46.6 |
