New Zealand’s services sector expanded for a third consecutive month in August, with the BNZ–BusinessNZ Performance of Services Index rising from 50.6 to 51.2. The reading was also above June’s 50.9, matched the level recorded in December 2025 and was the strongest since September 2023. The three-month moving average increased to 50.9, its highest since July 2023.
The composition was less convincing than the headline. New Orders/Business strengthened from 52.8 to 55.2, providing the clearest evidence that activity could improve further. However, Activity/Sales fell from 50.4 to 49.4, while Employment rose from 48.5 to 49.4 but remained in contraction. Stocks/Inventories eased from 51.7 to 50.8, and Supplier Deliveries improved from 48.4 to 49.0. Only two of the five sub-indices were above 50.
BusinessNZ Chief Executive Katherine Rich described the recovery as fragile, noting that most components had yet to return to expansion. Respondent sentiment also softened, with 60.8% of comments negative amid concerns about living costs, interest rates and election uncertainty. BNZ Senior Economist Doug Steel said the rising three-month average provided some confidence that the sector was trending upward, but the divergence between stronger orders and weak current activity shows that a solid services recovery has yet to take hold.
Data Summary
| Indicator | August | July |
|---|---|---|
| BNZ–BusinessNZ PSI | 51.2 | 50.6 |
| New Orders/Business | 55.2 | 52.8 |
| Stocks/Inventories | 50.8 | 51.7 |
| Employment | 49.4 | 48.5 |
| Activity/Sales | 49.4 | 50.4 |
| Supplier Deliveries | 49.0 | 48.4 |
Key Takeaways
- New Zealand’s services sector expanded for a third consecutive month, with the PSI rising from 50.6 to 51.2.
- New Orders/Business provided the strongest signal, accelerating from 52.8 to 55.2.
- Activity/Sales fell below 50, while Employment and Supplier Deliveries also remained in contraction.
- Only two of the five components expanded, indicating that the recovery was still narrowly based.
- Negative comments increased to 60.8% of responses amid concerns about living costs, interest rates and election uncertainty.
- The rising three-month average supports an improving trend, but stronger orders have yet to translate into broader activity and hiring.
